3. Chinese economic growth is the outstanding feature of the world economic scene over the past two decades.
a. In 2010, U.S. output was $14.7 trillion, and Chinese out- put was $5.8 trillion. Suppose that from now on, the out- put of China grows at an annual rate of 10.5% per year, while the output of the United States grows at an annual rate of 2.6% per year. These are the values in each coun- try for the period 2000–2007 as stated in the text. Using these assumptions and a spreadsheet, calculate and plot U.S. and Chinese output from 2010 over the next 100 years. How many years will it take for China to have a total level of output equal to that of the United States?
b. When China catches up with the United States in total output, will residents of China have the same standard of living as U.S. residents? Explain.
c. Another word for standard of living is output per person. How has China raised its output per person in the last two decades? Are these methods applicable to the United States?
d. Do you think China’s experience in raising its standard of living (output per person) provides a model for developing countries to follow?