ECO 3341 Lecture Notes - Human Capital

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aa666

28 Jul 2022

School

St. John's University

Department

ECO - ECONOMICS

Course

ECO 3341

Professor

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Document Summary

There are several ways to improve the living standards for a country. To maintain current living standards, our production systems has to grow either at an equivalent rate or faster. Improvement in living standards essentially requires that output growth is greater than the rate of population growth. Standard of living is the output per person that is available in a given economy. And economy should utilize its resources to have the maximum output possible with the given inputs available. Also employment should be a goal of an economy because people should be able to satisfy their basic life needs. All resources should be utilized in an efficient and effective manner. If resources are underutilize then we run into problems. Then individuals cannot find work as well as earn an income to satisfy their basic needs. For unemployment, we can utilize labor policies to increase the output of an economy. We want to attempt to increase the labor productivity rate.

Related Questions

Suppose a country's real GDP increases. At the same time, its population also increases. What happens to its standard of living? Select one:

a. Its standard of living depends on the price level.

b. Its standard of living remains the same.

c. Its standard of living could rise if population growth exceeds output growth.

d. Its standard of living could rise if population growth is smaller than output growth.

Consider the table below-containing data for two nations, Alfa and Beta, for the years 1995 and 2015.

	1995		2015
Country	Average labor productivity	Output per person	Average labor productivity	Output per person
Alfa	$42,770	$14,114	$39,773	$20,661
Beta	$27,975	$13,428	$44,765	$21,935

a. Which of the following statements are true for nations Alfa and Beta:

	Labor productivity increased in both nations.
	Labor productivity decreased in both nations.
	Living standards increased in both nations.
	Living standards increased in Beta but not an Alfa.

b. Is it possible for average living standards to rise during a period in which average labor productivity is falling?

	No, because average living standards only increase because of increased labor productivity.
	Yes, if the output per person is falling less than labor productivity.
	No, because average living standards are measured as output per worker.
	Yes, if the nation experiences increased employment relative to population.