Macroeconomics (MindTap Course List)
10th Edition
ISBN: 9781285859477
Author: William Boyes, Michael Melvin
Publisher: Cengage Learning
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Question
Chapter 14, Problem 18E
To determine
To explain:
The factors that affect the variability of growth rate of real output.
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Which of the following is a benefit of long-run economic growth?
O A.
increased future interest rates
B.
a greater ability to reduce inequality
C. growth in nominal GDP greater than real GDP
D. decreased productive capacity
O E. decreased current saving and increased current consumption
. Suppose that society decided to reduce consumptionand increase investment.a. How would this change affect economic growth?b. What groups in society would benefit from thischange? What groups might be hurt?
. For a high-income economy like the United States, what aggregate production function elements are most important in bringing about growth in GDP per capita? What about a middle-income country such as Brazil? A low-income country such as Niger?
Chapter 14 Solutions
Macroeconomics (MindTap Course List)
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- A country faces diminishing marginal returns when increasing it's capital stock. If this country added 1,000 units of capital last year and saw their GDP rise by $500 per person, what would you expect to happen if they had added 2,000 units of capital instead? O GDP would increase by another $500 per person O GDP would increase by less than another $500 per person O GDP would increase by more than another $500 per person O It is impossible to tell what would happen What is a potential downside of using patents to promote the creation of new technology? Without a market test, patents might be given to technology which ends up being useless. O Government money may be directed towards unproductive goals. It slows the spread and development of those ideas by restricting competition. They prohibit competition forever. What is the law of diminishing marginal returns?arrow_forward2:37 PM Mon Apr 17 ents cordings O 3 camino.instructure.com It is impossible to determine which will be favored. Natural Resources Question 3 Which of the following policies would increase the likelihood of economic growth in a country which has recently discovered oil? O Dedicating some of the new revenue to the diversification of labor and capital. Increasing the salaries of government employees in the Energy Department. O Increasing government expenditures in anticipation of large future oil revenues. Dedicating some of the new revenue to intensive training in oil-related jobs. 35% Question 4arrow_forwardIn developed countries the phenomenon of population aging is happening because of longer life expectancy as well as lower birth rates and lower population growth rates. 1. Explain how the life-cycle theory can be used to deduce that while longer expected life increases individual and aggregate savings, a lower population growth rate may increase per capita saving in the short run but reduces it in the long run. 2. How does the LC theory suggest that immigration from developing countries maybe favorable for increasing aggregate consumption and savings in developed countries? In Pakistan there is currently a pensions crisis because the government did not plan pensions of public sector employees efficiently. Instead of raising funds from lifetime earnings of employees, and giving pensions as returns on savings, pensions currently require budgetary allocation in Pakistan, leading to financial burden on government. In developed countries like the US, where people plan their own…arrow_forward
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- For a high-income economy like the United States, what aggregate production function elements are most important in bringing about growth in GDP per capita? What about a middle-income country such as Brazil? A low-income country such as Niger?arrow_forwardThe following table shows the GDP per capita of various countries forthe years 1960 and 2010 in PPP-adjusted 2005 dollars. The table alsocontains the implied growth rates, which show how much on average eachcountry needed to grow each year to reach the 2010 level of GDP per capitastarting from the 1960 level of GDP per capita. Use the table to answer thefollowing questions. 1. During 1960-2010, which countries failed to reduce the gap betweentheir GDP per capita and the U.S. GDP per capita?arrow_forwardThe following table shows the GDP per capita of various countries forthe years 1960 and 2010 in PPP-adjusted 2005 dollars. The table alsocontains the implied growth rates, which show how much on average eachcountry needed to grow each year to reach the 2010 level of GDP per capitastarting from the 1960 level of GDP per capita. Use the table to answer thefollowing questions. 1. During 1960-2010, which countries were able to reduce the gap betweentheir GDP per capita and the U.S. GDP per capita?arrow_forward
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