Question.3105 - Chapter 25 2. 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? 4. 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. 7. True or false? If false, explain why. 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.Problems 1. 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? 3. Assume that a “leader country” has real GDP per capita of $40,000, whereas a “follower country” has real GDP per capita of $20,000. Next suppose that the growth of real GDP per capita falls to zero percent in the leader country and rises to 7 percent in the follower country. If these rates continue for long periods of time, how many years will it take for the follower country to catch up to the living standard of the leader country?Chapter 26 Questions 1. What are the four phases of the business cycle? How long do business cycles last? Why does the business cycle affect output and employment in capital goods industries and consumer durable goods industries more severely than in industries producing consumer nondurables? 5. Why is it difficult to distinguish between frictional, structural, and cyclical unemployment? Why is unemployment an economic problem? What are the consequences of a negative GDP gap? What are the noneconomic effects of unemployment?8. Distinguish between demand-pull inflation and cost-push inflation. Which of the two types is most likely to be associated with a negative GDP gap? Which with a positive GDP gap, in which actual GDP exceeds potential GDP? What is core inflation? Why is it calculated? Problems 2. Assume the following data for a country : total population, 500; population under 16 years of age or institutionalized, 120; not in labor force, 150; unemployed, 23; part-time workers looking for full-time jobs, 10. What is the size of the labor force? What is the official unemployment rate? 3. Suppose that the natural rate of unemployment in a particular year is 5 percent and the actual rate of unemployment is 9 percent. Use Okun’s law to determine the size of the GDP gap in percentage-point terms. If the potential GDP is $500 billion in that year, how much output is being forgone because of cyclical unemployment? 4. If the CPI was 110 last year and is 121 this year, what is this year’s rate of inflation? In contrast, suppose that the CPI was 110 last year and is 108 this year. What is this year’s rate of inflation? What term do economists use to describe this second outcome?
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Ans xxx modern xxxxxxxx growth xxxxx happened xx Netherlands xx the xx century xxx main xxxxxx of xxxxx earnings xxxx trading xxx fishing x huge xxxxx of xxxxx was xxxxxxxx in xxxxxxx up xx industries xxxx of xxxxx industries xxxx traditional xxx some xxxx new xxxx of xxxxx industries xxxx namely xxxxxxxx munitions xxxx boiling xxxxx refining xxxxxxx curing xxxxx and xxxxxxx cutting xxx setting xx of xxxxx industries xx develop xxx demand xx financial xxxxxxxxxxxx for xxxxxxxxxxx handling xxx money xxxxxxxxx from xxxxxxxxxxx that xxxxxxx Thus xxx Bank xx Amsterdam xxx established xx This xxx the xxxxx of xxx kind xx North xxxx Europe xxx was xxxxx on xxx operating xxxxx of xxxx of xxxxxx The xxxxx helped xxx businessmen xx get xxxxx at xxxxx interest xxxxx The xxxxx also xxxxxxx the xxxxx market xxxxx commodities xxxx traded xxxx also xxxxxxx futures xxxxxx for xxxxxxxxxxx where xxxxxxx could xxxxx commodities xxx future xx well xxx The xxxx supply xxxxxxx are xxx quantity xxx quality xx natural xxxxxxxxx the xxxxxxxx and xxxxxxx of xxxxx resources xxx stock xx capital xxxxx and xxx level xx technology xxx demand xxxxxx is xxx level xx purchases xxxxxx to xxxxxxxx full xxxxxxxxxx The xxxxxxxxxx factor xxxxxx to xxxx productive xxx allocating xxxxxxxxxx The xxxxx figure xxxxxxxxxxx these xxxxxx factors xx showing xxxxxxxx from xxxxx AB xx curve xx Ans x The xxxxx part xx false xxxxxxx technology xxx played xxx most xxxxxxxxx role xx U x economic xxxxxx of xxx growth xxxxxx However xxx second xxxx of xxx statement xx probably xxxx b xxxxx False xxxxxxxxxxx has xxxx a xxxxxx for xx expanded xxxxx force xxx also xxx expansion xx aggregate xxxxxx Ans xxxxxx rate xx real xxx percent x GDP xxx capita xx year xxx per xxxxxx in xxxx Growth xxxx of xxx per xxxxxx is xxxxxxx - xxx Applying xxx rule xx we xxxx the xxxxxx of xxxxx to xxxxxx GDP xxxxxx rate xxx leader xxxxxxx has xxxxxxx GDP xx and xxxxx the xxxxxx rate xx it xxxx stay xxx same xxx the xxxxxxxx country xxx a xxx of xxx the xxxxxx rate xx Thus xx reach xxx level xx leader xxxxxxx the xxxxxxxx country xxx to xxxxxx its xxxxxxx GDP xxxx the xxxx needed xx or xxxxx Ans xxx four xxxxxx of x typical xxxxxxxx cycle xxxxxxxx at xxx bottom xxx trough xxxxxxxx peak xxx recession xxx length xx a xxxxxxxx cycle xxxxxx from xxxxx to xxxxx to xx long xx years xxxxx is x pre-Christmas xxxxx in xxxxxxxxxx and xxxxx and x January xxxxxxxxxx This xxxxxx seasonal xxxxxxxxx does xxx signal xxxx or xxxxxxxxx From xxxxxx to xxxxxx the xxxxxxxxx trend xxx secular xxxxx of xxx U x economy xxx been xxxxxx A xxxxxx of xx GDP xxxxxx thus xxxx not xxxx all xx normal xxx that xxx economy xx operating xxxxx its xxxxx growth xx output xxxxxxx capital xxxxx and xxxxxxx goods xxxx purchases xxx be xxxxxxxxx This xxx happen xxxx a xxxxxxxxx is xxxxxxxx Capital xxx durable xxxxx industries xxxxxxxxx suffer xxxxx output xxxxxxxx during xxxxxxxxxx In xxxxxxxx consumers xxxxxx long xxxxxxxx the xxxxxx of xxxxxxxxxxx such xx food xxxxxxxxx recessions xxxx slightly xxxxxx nondurable xxxxxx Also xxxxxxx and xxxxxxx goods xxxxxxxxxxxx tend xx be xxxxx Usually x large xxxxxxxxxxx is xxxxxx to xxxxxxxx them xxx this xxxxxxx to xxxx after xxxxxxxx is xxxx Ans xx is xxx easy xx distinguish xxxxxxx these xxxxx types xx unemployment xxxxxxx the xxx of xxxxxxxxxx and xxxxxxxxxx unemployment xx itself xxxxxxxx thus xx is xxxxxxxxx to xxxxxxxxx the xxxx employment xxxxxxxxxxxx rate xxx example x person xxx quits x job xx search xx a xxxxxx one xxxxx normally xx considered xxxxxxxxxxxx unemployed xxx suppose xxx former xxx then xxxxxxxxxx completely xxxxxxx the xxxx is xx a xxxxxxxxx industry xxx can xx longer xxxx money xxx still xxxxxxx worker xxxxx now xx considered xxxxxxxxxxxx unemployed xxx then xxxxxxx the xxxxxxx slips xxxx a xxxxxx recession xx that xxx worker xxxxxx find xxx job xxx has xxxxxx cyclically xxxxxxxxxx The xxx of xxxxxxxxxx and xxxxxxxxxx unemployment xxxxxxxxxx as xxx labor xxxxx structure xxxxxxx In xxxxx words xxxxx is xx automatic xxxxx on xxx type xx unemployment xxxx someone xx counted xx unemployed xxxxxxxxxxxx is xx economic xxxxxxx because xx the xxxxxxx of xxxxxxxxxxx cost xxxxx apart xxxx any xxxx of xxxxxxxxxxxxx for xxxxxx unemployment xx economic xxxxx A xxxx of xxxxx resource xxxx could xx engaged xx production xx sitting xxxx The xxxxx GDP xxx rdquo xx the xxxxxxxxxx between xxxx the xxxxxxx could xxxxxxx at xxx potential xxx and xxxx it xx producing xxx actual xxx The xxxxxxxxxxx of x negative xxx gap xx that xxxx is xxx produced xxxxx the xxxxxx represented xx the xxx mdash xx lost xxxxxxx Moreover xx the xxxxxx that xxxx lost xxxxxxxxxx represents xxxxxxx goods xxx potential xxxxxxxxxx for xxx future xx impaired xxxxxx economic xxxxxx will xx less xxx noneconomic xxxxxxx of xxxxxxxxxxxx include xxx sense xx failure xxxxxxx in xxxxxxx and xx their xxxxxxxx the xxxxxxx of xxxxx useless xx society xx no xxxxxx belonging xxx Demand-pull xxxxxxxxx occurs xxxx prices xxxx because xx an xxxxxxxx in xxxxxxxxx spending xxx fully xxxxxxx by xx increase xx aggregate xxxxxx It xx sometimes xxxxxxxxx as xxxxx too xxxx spending xxxxxxx too xxx goods xxxxxxxxx inflation xxxxxxxxx prices xxxxxx because xx increases xx per xxxx costs xx production xxxxxxxxx inflation xx most xxxxxx to xx associated xxxx a xxxxxxxx GDP xxx as xxx rising xxxxxxxxxx costs xxxxxx spending xxx output xxxxxxxxxxx inflation xx more xxxxxx to xxxxx with x positive xxx gap xxxxxxx actual xxx will xxxxxx its xxxxxxxxx only xxxx aggregate xxxxxxxx is xxxxxx and xxxxxx As xxx economy xxxxxxxx its xxxxxxxxx bottlenecks xxx more xxxxx resource xxxxxxxx occur xxxxxxx up xxxxxx Core xxxxxxxxx is x measure xx inflation xxxx excludes xxxxxxx items xxxx face xxxxxxxx price xxxxxxxxx Core xxxxxxxxx eliminates xxxxxxxx that xxx have xxxxxxxxx price xxxxxx because xxxxx shocks xxx diverge xxxx the xxxxxxx trend xx inflation xxx give x false xxxxxxx of xxxxxxxxx Ans xxxxx force x Official xxxxxxxxxxxx rate xxxxxxxxxx labor xxxxx Ans xxx gap x x xxxxxxx output xxxxxxxxx at xx billion xxxxxxx Ans xxxx year xxx s xxxx of xxxxxxxxx - xxxx year xxx s xxxx of xxxxxxxxx - x A xxxxxxxx rate xx inflation xx referred xx as xxx quot xxxxxxxxx amp xxxxMore Articles From Economics
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