Chapter Questions
Outline some of the benefits and costs to society when it experiences growth.
Assume that per capita income is growing at different rates in the following countries: Nepal, 1.1 percent; Kenya, 1.7 percent; Singapore, 7.2 percent; Egypt, 3.9 percent. How long will it take for each country to double its income per person?
What roles do specialization and division of labor play in economists' support of free trade?
Who most likely worked longer to buy a dozen eggs:a person living in 2017 or a person living in 1910 ? Why?
Calculate real growth per capita in the following countries:a. Democratic Republic of Congo: population growth = 3.0 percent; real output growth $=-1.8$ percent.b. Estonia: population growth $=-0.4$ percent; real output growth $=4.2$ percent.c. India: population growth $=2.0$ percent; real output growth $=6$ percent.d. United States: population growth $=0.5$ percent; real output growth $=2.5$ percent.
In what ways do informal property rights limit growth?
How can an increase in the U.S. saving rate lead to higher living standards?
Demonstrate graphically how the loanable funds market translates savings into investment. What equilibrates saving and investment?
Using the demand and supply of loanable funds, demonstrate the effect of the following on the interest rate. As a result, what would you expect to be the impact of the change on growth?a. Government increases spending.b. Businesses become more productive.c. The people as a whole save more.
Name three types of capital and explain the differences among them.
How does growth through technology differ from growth through the accumulation of physical capital?
On what law of production did Thomas Malthus base his prediction that population growth would exceed growth in goods and services?
Why hasn't Thomas Malthus's prediction come true?
Classical growth theory and new growth theory both contribute to economists' understanding of how the sources of growth lead to economic growth.a. How are they the same?b. How do they differ?
Explain how each of the following is expected to affect growth: a. Increase in technology.b. Positive externalities.c. Patents.d. Learning by doing.e. Technological lock-in.
What are spillover effects and how do they affect growth?
What are network externalities and how do they lead to growth?
England once offered a prize to the person who invented an accurate clock that could be used on a ship. England then made the technology freely available. Do such policies lead to greater growth than leaving innovation to the market? Defend your answer.