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Chapter 9

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


Department
Economics
Course Code
ECO 1102
Professor
D. Gray
Chapter
9

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ECO 1102 Chapter 9 Textbook Notes - Economic Growth
Economic Growth๎€ - 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 capita๎€ - real GDP divided by the total population
Formula
http://www.domysciencehomework.com/how-to-define-gdp-per-capita/
Real GDP per capita growth rate๎€ - nominal GDP growth rate - inflation rate - population growth
rate
Formula
Nominal GDP growth rate - inflation rate - population growth rate
Compounding Growth๎€ - 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)๎€ - 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
Productivity๎€ - 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.) ๎€Physical Capital๎€ - 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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