Problem 1. Consider the formula P = 67.38 • (1.026)t. If we let P represent the population of Mexico in year t where t is the number of years from 1980.
The following table gives the estimated population (in millions) of Mexico for the years 1980 to 1986.
Year Population in Millions
1980 67.38
1981 69.13
1982 70.93
1983 72.77
1984 74.66
1985 76.60
1986 78.59
What would the population in 1990 have been if growth had continued in this same pattern?
Problem 2. Why is economic growth important? Why could the difference between a 2.5 percent and a 3 percent annual growth rate be of great significance over several decades?
Problem 3. Suppose an economy's real GDP is $30,000 in year 1 and $31,200 in year 2. What is the growth rate of its real GDP? Assume that population is 100 in year 1 and 102 in year 2. What is the growth rate of GDP per capita?