Reference no: EM13453522

Market Basket Good	2004 Price	2004 Quantity	2005 Price	2005 Quantity	2006 Price	2006 Quantity
Oil Change	$18	4	$20	4	$24	4
Tires	$50	2	$45	1	$45	2
Wiper Blades	$4	2	$4	1	$3	1
Engine Oil	$2	30	$5	27	$20	25

1) Calculate the growth in real GDP

a) between 2004 and 2005

b) between 2005 and 2006

c) between 2004 and 2006

Here is some data on the economy:

	2007	2008	2009	2010
Real GDP	$1,300,000	$1,328,000	$1,429,000	$1,411,000
Population	12,227	12,838	13,480	14,154

2) Calculate real GDP per capita

3) Calculate the growth rates for each year for real GDP and population.

4) Estimate the growth rates for each year for GDP per capita real using the growth rates from 4). Check your estimate by calculating the actual per capita growth rate.

5) Using the growth rates from 2008 to 2009, how long will it take

a) For real GDP to double?

b) For population to double?

c) For real GDP per capita to double?

6) Graph the effect of the population growth on the economy's real GDP. Be sure to use both the labor market graph and the production function graph.

7) Labor productivity decreases. Graph the effect of the change in productivity on the economy's real GDP. Be sure to use both the labor market graph and the production function graph.