ECON 1100 Chapter 14: Chapter 14 Introductory Macroeconomics Notes
17 Dec 2011
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14. 1 the remarkable rise in real gdp per capita: the record. The real gdp per person provides a measure of the quantity of good & services available to the typical resident of a country at a particular time. Gdp per person is good indicator of life expectancy, infant health, schooling etc. 14. 2 why small differences in growth rates matter. Power of compound growth: the fact that small differences in growth rates, maintained over long periods, will produce large differences in magnitude. Compound interest: the payment of interest not only on the original deposit but on all previously accumulated interest. Rule of 72: a rule of thumb stating that to find the number of years it takes a magnitude to double when its growing at a constant rate, divide 72 by the growth rate. 14. 3 why nations become rich: the crucial role of average labour productivity.
