ECON-1010 Chapter Notes - Chapter 9: Potential Output

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mphyde

12 May 2022

School

Vanderbilt University

Department

Economics

Course

ECON-1010

Professor

Hojjatallah Ghandi

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ECON-1010 Full Course Notes

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Many developing countries see much higher growth rates than the u. s. (although many also have lower or negative growth rates) Developing countries are often able to achieve such high growth rates because they are starting from a lower level w/ greater potential for advancement. Countries are able to adopt tech already developed in other countries and improve their education systems. An area of economics called growth theory is concerned w/ the question of what determines the growth rate. The growth rate of potential gdp depends on: The growth rate of the labor force. The growth rate of the nation"s capital stock. F(k,l) = function of capital and labor. The output in an economy is a function of capital and labor. Labor productivity: the amount of output a worker turns out in an hour (or a week, or a year) of labor. For the 1952-2002 period, labor productivity exhibits:

Related Questions

Many economists specializing in 'growth theory' contend that developing countries may achieve strong economic growth by increasing the amount of capital and labor available for production but that this type of growth strategy is incapable of supporting long-term economic growth in developed economies. Briefly explain the reasoning underlying this belief.

indigobat114

A cross-country analysis of money growth shows that

A. the growth rate in the money supply was lower in countries with lower inflation rates.

B. the growth rate in the money supply was higher in countries with lower inflation rates.

C. the growth rate in the money supply was higher in countries whether the countries had high or low inflation rates.

D. the growth rate in the money supply was the same whether the countries had high or low inflation rates.

E. the growth rate in the money supply was lower in countries with higher inflation rates.

silverferret259

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

ECON-1010 Chapter Notes - Chapter 9: Potential Output

ECON-1010 Full Course Notes

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