# ECO 1102 Chapter Notes - Chapter 9: List Of Countries By Real Gdp Growth Rate, Maternal Death, Human CapitalPremium

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Economic Growthî - the ability of the economy to increase the production of goods and services

3 aspects of the study of growth

1.) How growth is measured and patterns that have emerged around the world in the last

century

2.) A Framework for understanding why growth happens, how savings, capital, labour and

technology contribute to it.

3.) How public policy choices can affect growth

Real GDP per capitaî - real GDP divided by the total population

Formula

http://www.domysciencehomework.com/how-to-define-gdp-per-capita/

Real GDP per capita growth rateî - nominal GDP growth rate - inflation rate - population growth

rate

Formula

Nominal GDP growth rate - inflation rate - population growth rate

Compounding Growthî - We start from Year B and multiply by 1 plus the growth rate, as many

times as there are years are between B and A

Formula

Pg. 265, Chapter 9, Macroeconomics (Canadian Edition) - Karlan, Morduch, Alam, Wong, 1st

Edition, Economic Growth

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Example of Compounding Growth

Pg. 265, Chapter 9, Macroeconomics (Canadian Edition) - Karlan, Morduch, Alam, Wong, 1st

Edition, Economic Growth

Rule of 70 (years to double)î - A method for determining the number of years it will take for some

measure to double, given its annual percentage increase. Example: To determine the number of

years it will take for the price level to double, divide 70 by the annual rate of inflation.

https://www.quora.com/What-is-the-rule-of-70

Productivityî - the ratio of the quantity and quality of units produced to the labor per unit of time

- increases in productivity per person can lead to rises in per capita income, such as "Economic

Growth"

Determinants of Productivity

1.) îPhysical Capitalî - the human-made objects used to create other goods and services

- examples are the stock of equipment and structures that allows for the production of

goods and services, a manufacturer's factory and machines

- it is calculated by adding up the value of all tools, equipment and structures

- money for investment in physical capital largely comes from the savings of ordinary

households

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