Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 25 - Economic Growth - Problems - Page 525: 5

Answer

${$1600}$ Growth rate: $31.25\%$

Work Step by Step

The GDP is equal to the number of work hours multiplied by the productivity per hour. So in year 1, the real GDP of New Zombie is 200 hours $\times {$8}$/hour = ${$1600}$. Following this process, for year 2, the real GDP of New Zombie is 210 hours $\times {$10}$/hour = ${$2100}$. The growth rate is equal to the change in GDP over the initial. So the rate of economic growth for New Zombie is $\frac{$2100 - $1600}{$1600}$ = 31.25%.
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