Question

Real GDP per person in both Alpha and Omega is equal to $2,000. Over the next 100 years, real GDP per person grows at a 1 percent annual rate in Alpha and at a 2 percent annual rate in Omega. After 100 years, real GDP per person in Alpha is ______ smaller than real GDP per person in Omega.

Answer 1

Real GDP per person in both Alpha and Omega is equal to $2,000. Over the next 100 years, real GDP per person grows at a 1 percent annual rate in Alpha and at a 2 percent annual rate in Omega. After 100 years, real GDP per person in Alpha is $9,079.66 smaller than real GDP per person in Omega.

Step-by-step explanation:

The GDP in Alpha will grow at a rate that is the half of the rate for Omega this difference makes that after 100 years the GDP per capita for the countries will be significantly different:

GDP Alpha $5,409.63

GDP Omega $14,489.29

Difference $9,079.66

Please see the image attached