Macroeconomics: Principles and Policy (MindTap Course List)
13th Edition
ISBN: 9781305280601
Author: William J. Baumol, Alan S. Blinder
Publisher: Cengage Learning
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Chapter 7, Problem 2TY
To determine
To describe: The given pattern helps in explaining the US productivity performance since mid-1970s.
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Chapter 7 Solutions
Macroeconomics: Principles and Policy (MindTap Course List)
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- Productivity and growth policies Consider a hypothetical small island nation in which the only industry is cloud computing. The following table displays information about the economy over a two year period. Complete the table by calculating physical capital per worker as well as labor productivity. Hint: Recall that productivity is defined as the amount of goods and services a worker can produce per hour. In this problem, measure productivity as the quantity of goods per hour of labor. Year 2039 2040 Physical Capital (Servers) 200 480 Labor Force (Workers) Based on your calculations, productivity from 2039 to 2040. 100 120 Physical Capital per Worker (Servers) Labor Hours (Hours) 4,500 4,200 in physical capital per worker from 2039 to 2040 is asociated with Suppose you're in charge of establishing economic policy for this small island country. Output (TB of data storage) 40,500 75,600 Imposing restrictions on foreign ownership of domestic capital Subsidizing research and development…arrow_forwardWhich of the following is true of the growth in the U.S. economy from 1950 to 2007? Growth resulting from technology > growth resulting from human capital > growth resulting from physical capital Growth resulting from technology > growth resulting from physical capital > growth resulting from human capital Growth resulting from physical capital > growth resulting from technology > growth resulting from human capital Growth resulting from human capital > growth resulting from technology > growth resulting from physical capitalarrow_forwardRobert Fogel is an economic historian best known for work suggesting that a significant factor in long-run economic growth is: Inward-oriented policies that protect domestic firms from foreign competition Improvements in the protection of property and enforcement of contracts through the maturation of the civil and criminal justice systems Improvements in technology from the incentives created by a better patent system Improvements in worker health from better nutritionarrow_forward
- Explain why there is such a close relationship between changes in a nation’s rate of productivity growth and changes in its average real hourly wage.arrow_forwardis it true or false that the growth rate of the GDP per worker for an economy where the capital to output ratio is constant represent the long run economic growth? whyarrow_forwardExplain the sources of productivity growth in an economy. Be precise, and make sure you are covering all of the mechanisms through which productivity changes in time.arrow_forward
- Countries X and Z produce a composite output Y by employing two factors labor (N) and capital (K), when the given state of technology is A. The production function of Y is Y = √(K)(AN) In a particular year, Country X's growth rate of output per worker is 4.2%, growth rate of employment is 3.1%, and growth rate of capital is 3.9%. In the same year, Country Z's growth rate of output per worker is 7%, growth rate of employment is 1%, and growth rate of capital is 8%. What is the growth rate of technological progress for the two countries? (Round your responses to two decimal places.) Country X: gax= Country Z: 9AZ = % Given the above information, which combinations of the following statements are true? a) Country X and Country Z are investing heavily in innovation and R&D. b) Country X has achieved its balanced growth path. c) Country Z could be using a combination of heavy capital formation and import of technology. d) Country Z has a higher standard of living than Country X. O A. a, b…arrow_forwardWhat are the two major determinants of the overall growth of the economy according to the view of economic growth based on labor data?arrow_forwardWith reference to a Cobb-Douglas production function, if a country has a declining labor share that is expected to continue in the future, does that imply that the country will experience faster economic growth (growth in GDP per capita) in the future?arrow_forward
- Choose the following opton: 1) In the very long run, across the next fifty years, a country’s economic standard of living as measured by Real GDP Per Person can grow steadily as a result of sustained growth in one of the following two values. The correct focus of growth policy will be to promote: (a) Labor Productivity (b) Total Labor Effort 2) The correct answer to Q#1 is a consequence of which feature of any country’s economy. In the very long run, fifty years and beyond: a) Total Labor Effort (Aggregate Labor Hours) can grow faster than a country’s Population. b) Total Labor Effort (Aggregate Labor Hours) cannot grow faster than a country’s Population.arrow_forwardDescribe the specific factors accounting for the United States' economic growth.arrow_forwardLong-run economic growth can occur as a result ofarrow_forward
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