Economics 1022A/B Lecture Notes - Lecture 5: Root Mean Square, Potential Output, Real Wages

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coffeearmadillo998

9 Mar 2016

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ECON 1022A/B Full Course Notes

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The real gdp growth rate equals the percent change in the real gdps of two years. Tells us how fast the total economy is changing. The real gdp per capita growth rate is the percent change in real gdp per capital over two years. The expansion of potential gdp is economic growth. A move from inside the production possibilities to the edge is a correction, not a growth. Business cycle uctuations in real gap per person masks what is really going on in terms of expansion. To nd how long it would take to double an investment, divide 70 by the yearly rate of return. Average growth rate is 2% per year. Two of the biggest downfalls were the grate depression and ww2. Economic growth is a year after year growth in potential gdp. The quantity of labour is the only variable in how well gdp performs relative to potential gdp.

Related Questions

A. A Chinese restaurant buys 100 cups of rice for a total of $10; they buy soy, fish and oyster sauces for a total of $20; they buy assorted vegetables for $40. They create 50 meals with these ingredients and sell each one for $5. How much does this process contribute to GDP? $70 $180 $250 $200 A country aims to double real GDP per capita in the next 10 years. This means that on average real GDP per capita must grow at ____ per year

B. A country aims to double real GDP per capita in the next 10 years. If the rate of population growth in the country is 1% per year then this means that real GDP must grow at ____ per year.

C. A country wants its real GDP per capita to grow at a rate of 2.5% per year. If the rate of population growth in the country is 1% per year and the inflation rate is 2% per year then this means that nominal GDP must grow at ____ per year.

5.5%
2.5%
4.5%
3.5%

cerisejellyfish113

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

1. Economic growth is measured as an increase in real GDP.

True/False

2. Per capita real GDP

a) is equivalent to the real GDP level.
b) is a measure of the value of output produced and available to an average person.
c) is higher in developing countries.
d) is a measure of an economy's income distribution.
e) is a measure of the GDP per country.

3. Suppose Congress enacts a 5 percent decrease in annual military expenditures. Other things equal, this will be associated with a movement down along the aggregate demand curve.

True/False

4. In relative terms, globalization has affected all countries equally.

True/False

5. There was more immigration in the nineteenth and early twentieth centuries than there is in the present day.

True/False

6. Suppose that Italy's average annual growth rate is 6 percent and Canada's average annual growth rate is 4 percent. Then the time required for Canada's growth rate to double will be 12 years more than the time required for Italy's growth rate to double.

True/False

7. Assume that annual real GDP increases by 4.5 percent and the population size grow by 2.7 percent in a year. The annual percapita real growth rate will be 2.8 percent

True/False

8. Most developing countries

a) have no natural resources.
b) experience slow growth in their labor force.
c) allocate their resources to the production of capital goods.
d) are unable to convert their natural resources into productive inputs.
e) make inefficient use of their technological advancement.

9. Economic statistics show that in compared to First World countries, developing countries have

a) a higher life expectancy.
b) higher productivity rates.
c) lower education levels.
d) lower birthrates.
e) a higher rate of private investment.

silverotter427

Economics 1022A/B Lecture Notes - Lecture 5: Root Mean Square, Potential Output, Real Wages

ECON 1022A/B Full Course Notes

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