Exam 8: Economic Growth

Economic growth can be illustrated by an outward shift of the production possibilities curve.

If a nation's real GDP grows at approximately 3.4% per year and its population doubles in 120 years, calculate the approximate rate of change in per capita real GDP.

Figure 8-5 Panel (a) shows an economy's aggregate production function, Panel (b) shows the labor market and Panel (c) shows the economy's long-run aggregate supply curve. -Refer to Figure 8-5. In Panel (c), the position of the long-run aggregate supply curve is determined by

Suppose real GDPs in Hauck and Meran are identical at $10 trillion in 2010. Suppose Hauck's economic growth rate is 2% and Meran's is 4% and the rates remain constant over time. Calculate the percentage difference in their levels of potential output in 2046.

Increases in human capital will promote economic growth.

The real wage is the ratio of the price level to the nominal wage.

If the rate of growth of output is 10% and the rate of growth of per capita real GDP is 6%, what is the rate of growth of population?

Which of the following events will shift the long-run aggregate supply curve?

In the U.S., between 1990 and 2007, capital stock and the level of technology increased dramatically. During the same period, employment and real wages rose. What do these set of events suggest?

If population increases at an average rate of 1% per year and output increases at an average rate of 5% per year, then per capita real GDP will double in

An increase in the capital stock would shift the production function _______ and the long-run aggregate supply curve to the _______.

Investment in human capital

During the industrial revolution, technological changes, capital investment, and the number of workers employed all increased. What must be true about capital and labor?

Exponential growth means the growth rate increases over time.

The aggregate production function shows the ________ for given levels of labor and other factors of production.