What are the growth rates of potential gdp in two countries?


Problem

Country A and Country B have identical population growth rates of 1 percent per annum, and everyone in each country always works 40 hours per week. Labor productivity grows at a rate of 2 percent in Country A and a rate of 2.5 percent in Country B. What are the growth rates of potential GDP in the two countries?

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Macroeconomics: What are the growth rates of potential gdp in two countries?
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