An Economy of 25 Million People Has Twenty Percent of Them

question 70

Multiple Choice

An economy of 25 million people has twenty percent of them engaged in research and development,where their productivity is 0.0056.The economy is on a balanced growth path,when suddenly a wave of immigration raises the population to 27 million.Assume that the new workers are immediately "on the job," and that the fraction engaged in R&D remains twenty percent.For the one period that begins with this population increase,the growth rate of output per person is ________.[Refer to the instruction above.]

• A)4.3%
• B)1.8%
• C)3%
• D)8%

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Definitions:

Treasury Bills

Short-term government securities issued at a discount from the face value and mature in one year or less, representing a secure, low-risk investment option.

Optimal Weights

The most efficient proportion of different assets in an investment portfolio, aiming to maximize returns and minimize risk.

Expected Rate

The anticipated return or yield on an investment or financial instrument over a certain period.

Real Holding-period Return

The total return on an investment, accounting for inflation, over the period it is held, reflecting the true increase in purchasing power.