8) Suppose you are asked to analyze an economy with an employed labor force of 1
ID: 1190678 • Letter: 8
Question
8) Suppose you are asked to analyze an economy with an employed labor force of 100 million workers, a capital stock of 25,000 billion USD and total factor productivity equal to 5. You also estimate the APF for the country to be: .
a) What is the value of RGDP?
b) If the employed labor force increases by 10%, what is the value of RGDP now?
c) Sketch a graph of your results with employment on the X axis.
d) Now suppose that total factor productivity doubles. What is the value of RGDP?
e) Sketch a graph of your results with employment on the X axis.
Explanation / Answer
Gross Domestic Product or GDP is the most acurate and an apt definition of the condition of a country's economy.
The question suggests facts about the country's economy, although for calculation of RGDP various other factors apart from those mentioned above need to be conosidered and calculated.