MGEA06H3 Chapter Notes - Chapter 9: Total Factor Productivity, Growth Accounting, Diminishing Returns

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taupeduck639

4 May 2016

School

UTSC

Department

Economics for Management Studies

Course

MGEA06H3

Professor

Iris Au

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MGEA06H3 Full Course Notes

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Real gdp per capita: real gdp divided by population (isolate the effect of changes in population) Number of years for variable to double = Tell us how long it takes real gdp per capita, or any other variable that grow gradually over time, to double. (can only apply to a positive growth rate) Pitfalls*** note that a change in the level of variable a change in growth rate. Sustained economic growth occurs only when the amount of output produced by the average worker increases steadily. High productivity is the only sauce of lr growth. In the lr, the rate of employment is not very different from the rate of population growth. Increase in physical capital -manufactured resources such as buildings/machines. Increase in human capital improvement in labour by education. Growth accounting suggests that human capital and its effect in productivity. Is more important determinant of growth than increases in physical capital.

Related Questions

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

6. U.S. Workers World's Most Productive
American workers stay longer in the office, at the factory, or onthe farm than their counterparts in Europe and most other richnations, and they produce more per person over the year...
Productivity...is found by dividing the country's gross domesticproduct by the number of people employed...
Only part of the U.S. productivity growth,...can be explained bythe longer hours Americans are putting in...[The U.S.] also beatsall 27 nations in the European Union, Japan, and Switzerland in theamounts of wealth created per hour of work...
The U.S. employee put in an average 1,804 hours of work in2006...compared with 1,407.1 hours for the Norwegian worker and1,564.4 for the French. It pales, however, in comparison with theannual hours worked per person in Asia, where seven economies -South Korea, Bangladesh, Sri Lanka, Hong Kong, China, Malaysia andThailand - surpassed 2,200 average hours per worker. But thosecountries had lower productivity rates...CBS News, September 3,2007

a. What is the difference between productivity in this article andper capita real GDP?

b. Identify and correct a confusion between levels and growth ratesof productivity in the news article.

c. If workers in developing Asian economies work more hours thanAmericans, why are they not the world's most productive?

taneel463

American workers stay longer in the office, at the factory, or onthe farm than their counterparts in Europe and most other richnations, and they produce more per person over theyearâ¦.Productivityâ¦.is found by dividing the countryâs grossdomestic product by the number of people employedâ¦.Only part of theUS productivity growth,â¦.can be explained by the longer hoursAmericans are putting inâ¦.[The US] also beats all 27 nations in theEuropean Union, Japan, and Switzerland in the amount of wealthcreated per hour of workâ¦.The US employee put in an average 1,894hours of work in 2006â¦compared with 1.407.1 hours for Norwegianworker and 1,564.4 for the French. It pales, however, in comparisonwith the annual hours worked per person in Asia, where seveneconomies â South Korea, Bangladesh, Sri Lanka, Hong Kong, China,Malaysia and Thailand â surpassed 2,200 average hours per worker.But those countries had lower productivity ratesâ¦. CBS News,September 3, 2007

a) What is the difference between productivity in this article andper capita real GDP?
b) Identify and correct confusion between levels and growth ratesof productivity in the news article.
c) If workers in developing Asian economies work more hours thanAmericans, why are they not the worldâs most productive?

yellowpanda187

MGEA06H3 Chapter Notes - Chapter 9: Total Factor Productivity, Growth Accounting, Diminishing Returns

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