Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 25, Problem 2QCMC
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Comparison of GDP between rich and other countries.
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1. Haiti is one of the poorest countries in the world. Suppose you were asked to be an advisor to the policymakers of Haiti. Please briefly discuss two policies that you would recommend to them to promote economic development in their country.
In the diagram below, which of the following economies have a more equal income distribution?
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Economy A.
(b)
Economy B.
(c)
Economy C.
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The Importance of Productivity Two well-known economists, William Baumol and Alan Blinder, have stated that, in the long run, “nothing contributes more to reduction of poverty, to increases in leisure, and to the country’s ability to finance education, public health, environmental improvement and the arts” (1991, 356) than the rate of growth of productivity. 1. Define productivity. 2. See if you can verify Baumol and Blinder’s very strong claim (“nothing contributes more ...”) through the following exercise. Assume GDP in the United States is $10 trillion and that the labor force remains constant in size and fully employed. Estimate the value of GDP in one year’s time if productivity growth is 3%. What if it were only 2%? How much will GDP fall in two years’ time if productivity growth remains at 2% rather than 3%? In three years? 3. Why might environmental regulation reduce productivity growth? 4. Why might it increase…
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Principles of Economics, 7th Edition (MindTap Course List)
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- What is likely to happen to income inequality in a developing country as it undergoes rapid industrialization? A. Income inequality will decrease significantly. B. Income inequality will remain the same. C. Income inequality will increase initially, but may decrease over time. D. Income inequality will increase and continue to rise indefinitely.arrow_forwardTell One Positive and normative statement about universal basic income in Canada in any article.arrow_forwardMust we have inequality for economic growth? A. Yes, disparities in income and wealth encourage hard work and saving. B. Yes, the richer individuals are in society, the more they can invest their capital in society and produce jobs for all. C. No, inequality stymies economic growth. More unequal nations grow less quickly than more equal societies - potentially due to speculative spending, and low healthcare outcomes and educational attainment for poorer people leading to less productivity. D. No, it is mean spirited and makes people dislike each other.arrow_forward
- How can you explain that the per capita GDP has been almost multiplied by three from 1820 to 1913 but it increased only by 60% in the Ottoman Empire?arrow_forwardWhich is NOT causing the growth of slums, according to Mike Davis? Group of answer choices Lack of economic development in cities IMF structural adjustment programs Rising crime and drug abuse Growth of large-scale industrial agriculturearrow_forwardWhich of the following Gini coefficients indicates that a country has an equal distribution of income? A.1 B.0.7 C.0.5 D.0.2 E.0arrow_forward
- In a capitalist economy, is income inequality necessary for economic growth?arrow_forward71.Improvements in nutrition and health care typically increase life expectancies and decrease mortality rates , but don't increase the rate of population growth . T Farrow_forwardCritically evaluate the following statement (i.e. discuss whether you agree with the statement or not, which part of the statement is correct, which is not correct, if the information in the statement is correct only in specific context, etc. Comment on each sentence/piece on information one by one): ‘Africa is the poorest region in the world.’arrow_forward
- How so gains in worker productivity lead to gains in per capita GDP? A. as workers produce, their wages will rise and they will have more disposable income for consumption, leading to a rise in GDP per Capita. B.The amount a worker can produce and that worker's income are exactly equal so that these numbers stay the same. C.The amount a worker can pproduce and that workers's income are not always exactly equal, so these numbers may differ. D. An aggregate production function describes the input of an entire economy based on various outputs such as capital, labor and technology.arrow_forwardThe International Property Rights Index (IPRI) scores countries based on the legal and political environment and how well property rights are protected. The following table lists the IPRI scores and GDP per person in 2018 for six countries. Norway Singapore United Kingdom Brazil Algeria Bangladesh IPRI Score 8.5 8.4 8.1 5.7 4.1 3.4 GDP per Person (Current US Dollars) 82,372.4 61,230.2 42,260.9 9,126.9 4,449.8 1,736.3 Countries with higher income per person generally have What can the government of a relatively poor country do Encourage transmission of knowledge by remo poorer better property rights protection than those with lower income per person. ote economic prosperity? Check all that apply. nts and copyrights.arrow_forwardDiscuss the factors that determine whether the standard of living in a country will be high or low. Why do poor countries find it difficult to raise the standard of living of their citizens?arrow_forward
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