Economics 1022A/B Lecture Notes - Lecture 3: Real Wages, Potential Output, Diminishing Returns

20 views3 pages

limecat429

28 Feb 2016

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

maroonwoodchuck8495771 and 39243 others unlocked

ECON 1022A/B Full Course Notes

Verified Note

27 documents

Document Summary

Economic growth the expansion of production possibilities. Growth rate annual percentage change of a variable. Growth rate of real gdp, for example is calculated as: Real gdp growth rate = real gdp current year real gdp previous year x 100% Standard of living depends on real gdp per person real gdp divided by the population. We use the above formula to calculate this growth rate, by replacing real gdp with real gdp per person. Sustained growth of real gdp per person can transform a poor society into a wealthy one. Rule of 70 calculates the amount of years it takes for the level of any variable to double, including real gdp per person. States that the number of years it takes for the level of any variable to double is approximately 70 divided by the annual percentage growth rate of the variable. The graph shows real gdp per person in canada between 1926 and.

Related Questions

The Rule of 70 states that the number of years it takes for the level of any variable to? ______ is approximately? ______.

A.?double; 70 divided by the annual percentage growth rate of the variable

B.increase by a factor of? 70; 1/70 multiplied by the annual percentage growth rate of the variable

C.?double; 70 multiplied by the annual percentage growth rate of the variable

D.increase by a factor of? 70; 70 divided by the annual percentage growth rate of the variable

If real GDP per person doubles in 20? years, then the annual growth rate of real GDP per person is? ______ percent a year.

A.14.0

B.28.5

C.3.5

D.14.3

The following table reports real GDP per person for several different economies in the years 1960 and 2000. It also gives each economy's average annual growth rate over this period. For example, real GDP per persion in Senegal was $1,776 in 1960 and actually declined to $1,571 by 2000. Senegal's average annual growth rateduring this period was -0.31%, and it was the poorest economy in the table in the year 2000.

The real GDP per person figures are denominated in U.S. dollars with the base year of 1996. The following questions help you to understand the different growth experiences of the economies in the table.

Real GDP per person

economy: Singapore, Senegal, France, Austria, India, China
1960 ($):4,219, 1776, 8531, 8444, 892, 448
2000($): 29434, 1571, 25045, 27000, 2644, 4002
growth rate (%) : 4.98, -0.31, 2.73, 2.95, 2.75, 5.63

1. Which economy had the highest level of real GDP per person in the year 2000?
a. China
b. France
c. Singapore
d. Austria

2. In which economy did real GDP per person grow at the fastest rate from 1969 to 2000?
a. China
b. France
c. Singapore
d. Senegal

3. Consider the following list of four countries. Which economy began with a level of real GDP per person in 1960 that was well below that of France and grew fast enough to catch up with and surpass France's real GDP per person by 2000?
a. China
b. France
c. Singapore
d. Senegal

greysea-lion209

Assume the following problem is based on 2010 economic data for the following countries associated with the North American Free Trade Agreement (NAFTA):

United States	Mexico
Real GDP per capita $44,000	Real GDP per Capita $11,000

a. What is the definition and the formula for the rule of 70?
b. Assuming that real GDP per capita in Mexico grows at the rate of 5 percent per year, how long will it take for Mexico's economy to double?
c. How many years will it take for Mexico's economy to reach the level of the United States real GDP per capita in 2010?
d. Using economic growth theory, what has helped Developing Countries (DVCs) like the Asian Tigers of Singapore, South Korea, Thailand, Hong Kong, and Japan transform into Industrially Advanced Countries (IACs)? e. Based on our discussion in class, Superstar Economist Alan Greenspan classified the large transition economies of India and China as Elephants. Explain the meaning of this phrase

olivelocust107

Economics 1022A/B Lecture Notes - Lecture 3: Real Wages, Potential Output, Diminishing Returns

ECON 1022A/B Full Course Notes

Document Summary

Get access

Related Documents

Economics 1022A/B Lecture 3: Chapter 22

Economics 1022A/B Chapter Notes - Chapter 22: Real Interest Rate, Potential Output, Business Cycle

Economics 1022A/B Chapter Notes - Chapter 22: Root Mean Square, Production Function, Human Capital

Related Questions