ECON 3T03 McMaster University The Growth Equation and Growth Rate Questions

1. (60 points) This problem is based on the growth equation (see pages 10-11 of the textbook or watch “Growth Equations” video).

(a) How long will it take for Avataria with an annual growth rate of 6.5% to increase its income by 7 times?

(b) What was the annual growth rate in Twilightia, if its national income decreased from $78,000,000 in 2010 to $65,500,000 in 2020?

2. (40 points) What was the GDP in your home country in 2019? In your opinion, which problem from the list “Something wrong with the numbers?” from Chapter 1 – Part 1 is the most serious for the calculations of GDP in your home country? Explain, i.e., do some research to find the article that discusses this problem and cite it (do not forget to provide the weblink to this article). If it is hard to find the answers for your home country, try to find them for Canada.