Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 25, Problem 1QR
To determine
Importance of the level and growth of GDP .
Expert Solution & Answer
Explanation of Solution
The level of a nation’s GDP measures both the total income earned by the nation and the total expenditure on the nation’s output of goods and services.
The growth rate of real GDP is a good measure of economic progress whereas the level of GDP is a good measure of economic prosperity. It is always preferred to live in a nation with greater economic prosperity; hence it is preferred to live in a nation with a high level of GDP than a low level of GDP even if the nation has a low growth rate.
Economics Concept Introduction
Concept Introduction:
GDP (Gross Domestic Product): Gross domestic product refers to the value of total goods and services produced in the given period of time within the boundaries.
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
What does the level of a nation's GDP measure?What does the growth rate of GDP measure?Would you rather live in a nation with a high level of GDP and a low growth rate or in a nation with a low level of GDP and a high growth rate?
How quickly does GDP need to grow in order to provide for population growth?
In 2018, India was the world’s seventh largest economy, with a $2.69 trillion GDP (as measured in U.S. dollars). India was also one of the world’s fastest-growing economies, with an annual growth rate of real GDP of 7.3%.
a. If the country maintains the same growth rate, how many years will it take for India’s GDP to double?
b. Bangladesh’s GDP was $286.27 billion, but its growth rate was equal to India’s. How many years will it take for Bangladesh’s economy to double?
c. Although Bangladesh and India have the same annual growth rate, their economies are much different in size. How can you explain the size difference to someone who is unfamiliar with scaling large numbers? Which strategies would you use?
Chapter 25 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
Knowledge Booster
Similar questions
- What is the relationship between the growth rate of real GDP and the growth rate of real GDP per person?arrow_forwardDoes the growth of real GDP measure the economic growth rate accurately?arrow_forwardThe table below lists GDP and GDP growth rates for the countries of Cortania, Microtania, and Boxtown. Fill in the final column, which asks for the GDP in each country 13 years later. Country GDP in $ billions GDP annual growth rate (%) Cortania Microtania Boxtown 10600.00 44000.00 48100.00 3 2 4.5 Glarrow_forward
- growth in real GDP is not always seen as economic growth. why?arrow_forwardWith three economies, each of which has a GDP per capita of $100. Trend growth in these economies is 2%, 2.5%, and 5% respectively. Calculate GDP per capita for each economy after 5,10,20,50, and 100 years.arrow_forwardCalculate real growth per capita in the following countries: Instructions: Enter your responses rounded to one decimal place. If you are entering a negative number, be sure to include a negative sign (-) in front of the number. a. Democratic Republic of Congo: population growth=2.6 percent; real output growth = -1.4 percent. Real growth per capita:% b. Estonia: population growth=-0.3 percent; real output growth 4.3 percent. Real growth per capita: % c. India: population growth = 2.1 percent; real output growth 6.2 percent. Real growth per capita: % d. United States: population growth = 0.4 percent; real output growth 2.6 percent. Real growth per capita: %arrow_forward
- If the current real GDP growth rate and population growth rate are maintained, real GDP per person will double in approximately ____ years answer with a whole numberarrow_forwardIn 2018, according to the International Monetary Fund, India had the world’s 7th-highest nominal GDP, the 142nd-highest nominal GDP per capita, and the 7th-highest real GDP growth rate. What does each of these indicators tell us about the Indian economy and how life in India compares to life in other countries? India has a huge economy that produces lots of goods and services (7th-highest nominal GDP), is still fairly poor (142nd-highest nominal GDP per capita), but has a rapidly increasing standard of living (7th-highest real GDP growth rate). India has a huge economy that produces lots of goods and services (142nd-highest nominal GDP per capita), is still fairly poor (7th-highest nominal GDP), but has a rapidly increasing standard of living (7th-highest real GDP growth rate). India has a huge economy that produces lots of goods and services (7th-highest nominal GDP), is still fairly poor (7th-highest real GDP growth rate), but has a rapidly increasing standard of…arrow_forwardSuppose an economy’s real GDP is $30,000 in year 1 and $31,200 in year 2. What is the growth rate of its real GDP? Assume that population was 100 in year 1 and 102 in year 2. What is the growth rate of GDP per capita?arrow_forward
- IS GDP important for economic growtharrow_forwardHypothetical data is given for the following countries. Calculate real growth per capita in the following countries: Instructions: Enter your responses rounded to one decimal place. If you are entering a negative number, be sure to include a negative sign (-) in front of the number. a. Democratic Republic of Congo: population growth = 2.8 percent; real output growth=-1.6 percent. Real growth per capita: % b. Estonia: population growth-(0.6) percent; real output growth-4.5 percent. Real growth per capita:[ % c. India: population growth=1.7 percent; real output growth = 5.9 percent. Real growth per capita: [ % d. United States: population growth 0.7 percent; real output growth = 2.8 percent. Real growth per capita: [arrow_forwardor 1. What is the metric we use to measure economic growth? China? 2. From 1990-2009, what was the average annual growth rate for the US? 3. What is per capital GDP? (review from Unit 5) 4. What does it mean to become more productive? 5. What are two ways society can increase productivity? a. b. 6. Briefly explain capital deepening. 7. We used to believe that innovation happened randomly and we had no way to induce innovation. The New Growth Theory is the idea that innovation is not random, but happens because of financial incentives. Therefore, if society rewards innovation, we will continue to have innovation, and therefore continued economic growth. What is one way society can financially incentivize innovation? 8. A nation cannot experience economic growth unless it has underlying societal institutions in place. What are these institutions? 9. Is democracy an institution that is necessary for growth? What evidence do you have to support your response?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc