lab 10, question 2

Consider two countries with the same level of potential GDP, say $100 billion, todayl Suppose potential GDP grows at an annual rate of 22 percent in Country One and 5.2 percent in Country Two. Based on this information: Note: The growth rates will compound to determine real GDP. Keep as much precision as possible during your calculations. Your nal answer should be accurate to at least two decimal places. (a) What will the potential GDP be of each country 15 years from now? Potential GDP in Country One = $ billion Potential GDP in Country Two = 5 billion (b) What will the potential GDP be of each country 40 years from novf! Potential GDP in Country One = $ billion Potential GDP in Country Two = $ billion