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 1940 and Mexico only since 1965. In 2015, Mexico's per capita GDP would have been about ________, while Argentina's would have been about ________.

Question

Quizplus · Accepted Answer

Mexico's growth period is 50 years (1965-2015), and Argentina's is 75 years (1940-2015). Using the formula for compound growth, GDP = Initial GDP * (1 + growth rate)^number of years, Mexico's GDP is $1,000 * (1.03)^50 ≈ $4,384, and Argentina's is $1,000 * (1.03)^75 ≈ $9,179.

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