ECON 2200 Lecture 7: Chapter 7 notes
Document Summary
Economic growth is the primary factor in explaining how well people live, their standard of living. Factors resulting from economic growth that contribute to the standard of living: reduced poverty rates. Improved health and longer life expectancies: greater investment in education and technology. The bureau of economic analysis (bea) provides quarterly reports on changes in u. s. gdp. The reports reflect the: annualized rate: the quarterly change in gdp is multiplied by 4; highlights seasonal fluctuations in growth, year-over-year rate: compares gdp at the current quarter with the previous (fill in notes) Compounding allows small rates of growth to turn into substantial increases in income over time. Depositing ,000 at a 5% annual return compared to a 10% annual rate makes a big difference over 35 years. The rule of 70 can be used to estimate the # of years for a value to double. 10% annual gain = 70/10 = 7 years to double value.
