Describe the economic growth that influence the living standard of people.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Which of the following is included in the GDP_________? Group of answer choices The two answers describe components of the GDP. The federal government expenditure on welfare payments. Households goods and services produced at home. Neither of the two answers describe components of the GDP.

What are two examples of where historical cost is used within the financial statements. State both the account name and the amount for each account selected. What was the amount of revenue that Airbnb reported for 2024? Did the revenue grow over the prior year of 2023? What was the dollar and the percentage increase or decrease?

What was the amount of revenue that Airbnb reported for 2024? Did the revenue grow over the prior year of 2023? What was the dollar and the percentage increase or decrease? What was the amount of net income or net loss that Airbnb reported for the year of 2024? Did the net income increase or decrease versus the prior year of 2023? What was the dollar and the percentage increase or decrease?

Answer 2

Question

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Answer 6

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Answer 7

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Answer 8

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.