EP ECON.TODAY:MACRO VIEW-MYECONLAB W/TX
EP ECON.TODAY:MACRO VIEW-MYECONLAB W/TX
19th Edition
ISBN: 9780134481234
Author: Miller
Publisher: PEARSON CO
Question
Book Icon
Chapter 18, Problem 18.1LO
To determine

Impact of population growth on economic growth.

Expert Solution & Answer
Check Mark

Explanation of Solution

The per capita income in the country measures the real growth of the economy. It implies how the growth in the country affects the income and employment of the economy. The Real GDP equals the total income divided by the population of the country in any given year. In other words,

Per Capita Real GDP=Real GDPPopulation.

he growth rate of the population equals the difference between the growth rate of the income and the growth rate of the population. This implies that,

Average annual growth rate of the per capita real income (yr)=Average Annual growth rate of income(y)Average annual population growth rate(p) .

Thus, the increase in the population growth rate staggers the growth effects in the economy. Further, the lower Real GDP deters the growth of the economy in the long run as the growth is distributed among increasingly higher number of heads to be fed. The higher population thus, absorbs the growth effect.

Economics Concept Introduction

Introduction:

Population growth An increase in the number of individuals in an economy leads to a growth of the population. An increase in the average human age coupled with a decreasing death rate leads to an increase in the population of country in specific and world at large.

Population growth rate - The average annual growth rate of the population of the country.

p=PtP(t1).

Where p = Population growth rate, P=Population, t=current time period and (t-1) = previous time period.

Economic Growth or rate of growth of GDP- It is the macroeconomic measure of the value of economic output in a country in a given year. Algebraically, the GDP equation is written as:

Y=C+I+G+(XM).

Where Y = GDP, C = Consumption, I = Investment, G = Government, X = Exports and M = Imports. The value of C, I, G and (X-M) changes with a change in the method of aggregation of the income.

Real GDP - GDP adjusted for inflation/deflation is the Real GDP of the country. It is also called the “constant price”, “inflation corrected” or “constant dollar GDP”. It is the significant economic measure indicating the economic growth and purchasing power in the economy. Algebraically it is expressed as:

Yr=GDP/D.

Where Yr = Real GDP, Y = GDP and D = adjustment factor.

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
2.) Using the line drawing tool​, plot and label the isocost line.   Carefully follow the instructions​ above, and only draw the required objects.   FILL IN BLANK  d. Now suppose the price of labour rises to​ $5 per​ unit, but the firm still wants to produce 500 tires per day. Explain how a​ cost-minimizing firm adjusts to this change​ (with no change in​ technology).   A​ cost-minimizing firm will be producing on ▼  The samedifferently slopedparallel   isocost line. The firm will use ▼  moresameless   labour and ▼  less the same amount of more capital and produce on ▼   a higher point on the same a lower point on the same a lower a higher isoquant curve.
QK Using the graph on the right, determine how the firm should change the quantity of the production factors in order to reduce the costs. The firm that is producing at point A can reduce its costs for producing 2000 units by employing A. same capital and more labour. B. less capital and more labour. ○ C. less capital and the same labour. D. more capital and more labour. OE. more capital and less labour. C A B Q =4000 Q = 2000 C Isocost line QL
PL Suppose the price ratio is the same along isocost PK lines A and B. In the figure at right, the difference between isocost line A and isocost line B is that A. the total cost is larger along B. B. the total cost is larger along A. OC. labour is relatively more expensive along A. ○ D. the level of output is lower along A. OE. both capital and labour are relatively cheaper along A. Capital B Labour
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:9780190931919
Author:NEWNAN
Publisher:Oxford University Press
Text book image
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Text book image
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Text book image
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Text book image
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education