Daily quiz-18 ( 02 /28): Print your name and ID in BLOCK letters.

1. Daily quiz-18 (02/28): Print your name and ID in BLOCK letters. Suppose two variables x and y are connected by the relationship, y = 9 x. Assume that x grows by 7.57%. What is the percentage change in y? Ans: ∆y/y = ∆x/x = 0.0757 or 7.57% Total wages and salaries make up 66%of GDP in the US economy. If GDP increases by 2% every year, what is the percentage change in total wages and salaries? Ans: ∆(W.L)/(W.L) = ∆GDP/GDP = 2% by the above relationship. On a small island, Total real GDP = 40,000 in 2000 and 42,000 in 2001. The population is 200 in 2000 and 208 in 2001. The workforce is 100 in 2000 and 103 in 2001. What is the growth rate between 2000 and 2001 of (1) total real GDP (2) per capita GDP and (3) labor productivity? Ans: 1. % change in total real GDP = ((42,000 – 40,000)/40,000) x 100 = 5% 2. Per capita real GDP = total real GDP/population . Hence, % change in per capita real GDP = % change in total real GDP - % change in population = 5% - 4% = 1% 3. labor productivity = total real GDP/workforce . Hence, % change in labor productivity = % change in total real GDP - % change in workforce = 5% - 3% = 2%