Question: This question refers to Table A. The country in question has based its economic growth on population growth -which includes immigration. Population increased from 20

This question refers to Table A. The country in question has based its economic growth on population growth -which includes immigration. Population increased from 20 million people (in the year 2010) to 30 million people (in 2020). The rate of inflation during the ten-year period has been zero (0) so that nominal GDP and real GDP are identical. The real wage remained constant during the ten-year period. The Gini ratio increased from 0.40 to 0.90. This is all the information available.

Items

Year 2010

Amount ($ billion)

Year 2020

Amount ($ billion)

Household Consumption 9.0 18.0
Gross Private domestic Investment 3.0 6.0
Total Government Spending 4.0 8.0
Exports 7.0 14.0
Imports 5.0 10.0

Gross Domestic Product

(GDP)

? ?

Table A

  1. Compute GDP for 2010 and 2020 [10 marks]
  2. Compute the economy's growth rate [10 marks]
  3. Did the standard of living improve? Explain carefully (it is not a "yes or no" question) [20 marks]
  4. Did the country experience "inclusive growth"? Explain carefully (it is not a "yes or no" question) [20 marks]

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