Assume that both Mexico's and Argentina's average annual per capita GDP growth rates are 3 percent per year,and both countries began with an initial per capita GDP of $1,000.However,Argentina has been growing since 1925 and Mexico only since 1950.In 2000,Mexico's per capita GDP would have been about __________,while Argentina's would have been about __________.
A)$19.42;$12.94
B)$9,179;$4,384
C)$51,500;$77,250
D)$48,544;$72,816
E)$4,384;$9,179

Question

Quizplus · Accepted Answer

Mexico's growth period is 50 years (1950-2000), and Argentina's is 75 years (1925-2000). Using the formula for compound growth, GDP = Initial GDP * (1 + growth rate)^years, Mexico's GDP = $1,000 * (1.03)^50 ≈ $4,384 and Argentina's GDP = $1,000 * (1.03)^75 ≈ $9,179.

Assume That Both Mexico's and Argentina's Average Annual Per Capita