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Economics Principles, Problems, and Policies

Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn

Chapter 25

Economic Growth - all with Video Answers

Educators

Chapter Questions

02:43

Problem 1

Why is economic growth important? Why could the difference between a 2.5 percent and a 3 percent annual growth rate be of great significance over several decades? LO1

Jin-Hwan Ro
Jin-Hwan Ro
Numerade Educator
03:10

Problem 2

KEY QUESTION Suppose an economy's real GDP is $\$ 30,000$ in year 1 and $\$ 31,200$ in year $2 .$ What is the growth rate of its real GDP? Assume that population is 100 in year 1 and 102 in year $2 .$ What is the growth rate of real GDP per capita? LO2

Mihir Nayar
Mihir Nayar
Numerade Educator
05:29

Problem 3

When and where did modern economic growth first happen? What are the major institutional factors that form the foundation for modern economic growth? What do they have in common? LO1

Mihir Nayar
Mihir Nayar
Numerade Educator
03:51

Problem 4

Why are some countries today much poorer than other countries? Are today's poor countries destined to always be poorer than today's rich countries? If so, explain why. If not, explain how today's poor countries can catch up or even pass today's rich countries. LO1

Mihir Nayar
Mihir Nayar
Numerade Educator
07:22

Problem 5

KEY QUESTION What are the four supply factors of economic growth? What is the demand factor? What is the efficiency factor? Illustrate these factors in terms of the production possibilities curve. LO2

Oluwadamilola Ameobi
Oluwadamilola Ameobi
Numerade Educator
01:48

Problem 6

Suppose that Alpha and Omega have identically sized working-age populations but that annual hours of work are much greater in Alpha than in Omega. Provide two possible explanations. LO2

Mihir Nayar
Mihir Nayar
Numerade Educator
04:04

Problem 7

Suppose that work hours in New Zombie are 200 in year 1 and productivity is $\$ 8$ per hour worked. What is New Zombie's real GDP? If work hours increase to 210 in year 2 and productivity rises to $\$ 10$ per hour, what is New Zombie's rate of economic growth? LO2

Mihir Nayar
Mihir Nayar
Numerade Educator
03:24

Problem 8

KEY QUESTION To what extent have increases in U.S. real GDP resulted from more labor inputs? From higher labor productivity? Rearrange the following contributors to the growth of productivity in order of their quantitative importance: economies of scale, quantity of capital, improved resource allocation, education and training, technological advance. LO2

Jin-Hwan Ro
Jin-Hwan Ro
Numerade Educator
02:56

Problem 9

True or false? If false, explain why. LO1
a. Technological advance, which to date has played a relatively small role in U.S. economic growth, is destined to play a more important role in the future.
b. Many public capital goods are complementary to private capital goods.
c. Immigration has slowed economic growth in the United States.

Xiaomin Bian
Xiaomin Bian
Numerade Educator
03:06

Problem 10

Explain why there is such a close relationship between changes in a nation's rate of productivity growth and changes in its average real hourly wage. LO2

Mihir Nayar
Mihir Nayar
Numerade Educator
03:52

Problem 11

KEY QUESTION Relate each of the following to the recent productivity acceleration: $L O 3$
a. Information technology
b. Increasing returns
c. Network effects
d. Global competition

Haricharan Gupta
Haricharan Gupta
Numerade Educator
02:03

Problem 12

Provide three examples of products or services that can be simultaneously consumed by many people. Explain why labor productivity greatly rises as the firm sells more units of the product or service. Explain why the higher level of sales greatly reduces the per-unit cost of the product. LO3

Jennifer Stoner
Jennifer Stoner
Numerade Educator
03:09

Problem 13

Productivity often rises during economic expansions and falls during economic recessions. Can you think of reasons why? Briefly explain. (Hint: Remember that the level of productivity involves both levels of output and levels of labor input.) LO3

Oluwadamilola Ameobi
Oluwadamilola Ameobi
Numerade Educator
05:56

Problem 14

LAST WORD Based on the information in this chapter, contrast the economic growth rates of the United States and China over the last 25 years. How does the real GDP per capita of China compare with that of the United States? Why is there such a huge disparity of per capita income between China's coastal cities and its interior regions?

Oluwadamilola Ameobi
Oluwadamilola Ameobi
Numerade Educator