Exam 22: Long-Run Economic Growth: Sources and Policies

Would you expect to see higher or lower growth rates for countries that start out with a relatively low level of real GDP per capita? Explain using the concept of "catch-up" and support your answer with a graph.

Figure 22-3 -Refer to Figure 22-3. Technological change is shown in the figure above by the movement from

Figure 22-1 -Refer to Figure 22-1. Using the per-worker production function in the figure above, the largest changes in an economy's standard of living would be achieved by a movement from

If real GDP in the United States is growing at an annual rate of 3.2% per capita and Bolivia's real GDP per capita is growing at a rate of 1.3%, which of the following would we expect in the long run? Assume real GDP per capita in the United States begins at a level above that of real GDP per capita in Bolivia.

Suppose that an increase in capital per hour worked from $15,000 to $20,000 increases real GDP per hour worked by $500. If capital per hour worked increases further to $25,000, by how much would you expect real GDP per hour worked to increase if there are diminishing returns?

High-income countries are also referred to as

Foreign direct investment occurs when a Chinese corporation

The per-worker production function has a ________ slope, indicating that increases in capital per hour worked ________ real GDP.

By offering more generous unemployment insurance programs, European countries can expect

Technological change allows the economy to produce more output with the same amount of capital and labor.

Figure 22-3 -Refer to Figure 22-3. Which of the following would cause an economy to move from a point like A in the figure above to a point like B?

Is knowledge capital subject to the law of diminishing returns? Explain.

Your friend owns a snow cone stand that he works by himself. He produces about 25 snow cones per hour. He wants to be able to produce twice as many snow cones per hour so he buys a second machine. He notices that he can only produce 10 more snow cones an hour. He jokes that he could have doubled his output with the second machine if he only had four hands. Using your knowledge of the production process, explain to your friend what you think has happened when he added more capital to his production process.

Growth in the United States from 1800 to 1900 can be characterized as

In a small European country, it is estimated that changing the level of capital from $8 million to $10 million will increase real GDP from $2 million to $3 million. If the number of hours worked in the labor force does not change, what does this information tell you about the slope of the per-worker production function in this range?

Starting at point B in the diagram below, identify which combinations of points illustrate technological change. Give a brief explanation to support your answer.

Until recently, many developing countries

From 1980 to 2016, the average annual growth rate for the Mexican economy has been 0.7 percent. Based on that growth rate and using the rule of 70, the number of years it will take real GDP per capita to double in Mexico is approximately

In 1973, the Club of Rome published a book titled The Limits to Growth, which predicted that economic growth would likely end in high-income countries because of

Figure 22-1 -Refer to Figure 22-1. Within a country, the impact of wars and revolutions and their subsequent destruction of capital is reflected in the per-worker production function in the figure above by a movement from