What is economic growth and the importance of economic growth rates.

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Answer 1

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 9, Problem 9.1LO

To determine

What is economic growth and the importance of economic growth rates.

Expert Solution & Answer

Explanation of Solution

Economic growth rate refers to the rate at which the output of an economy increases overtime. It is used as an indicator of economic well-being of a nation. Economic growth is used as the most powerful instrument for reducing poverty and improving the standard of living of the residents of a country.

Thus, economic growth rates are important for the following reasons,

a. Helps in reducing poverty - Economic growth imply growth in income in an economy. As income in a country increases it leads to a reduction in poverty in the country. Further, it is ambiguous whether this increase in income will lead to an increase in income inequality or a reduction in it. If rise in income is evenly distributed among different sections then growth will lead to a reduction in inequality and vice versa.

b. Generation of employment - Economic growth generates new job opportunities. The increase in jobs leads to a rise in demand for labor which in turn leads to a rise in wages and salaries of working classes.

c. Improvement in living standards - Economic growth leads to vicious circle of prosperity and opportunity. Economic growth in one period will increase output and income in the other period which will in turn induce firms to expand and increase output further. In addition to this, increased income due to economic growth will induce families to invest in education and improve their skills. This will lead to a further development in availability of skilled labor in future.

Economics Concept Introduction

Introduction:

Economic growth rate refers to the rate at which the output of an economy increases overtime. It is used as an indicator of economic well-being of a nation.

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1. Imagine a society that produces military goods and consumer goods, which we'll call "guns" and "butter." a. Draw a production possibilities frontier for guns and butter. Using the concept of opportunity cost, explain why it most likely has a bowed-out shape. b. Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient. c. Imagine that the society has two political parties, called the Hawks (who want a strong military) and the Doves (who want a smaller military). Show a point on your production possibilities frontier that the Hawks might choose and a point the Doves might choose. d. Imagine that an aggressive neighboring country reduces the size of its military. As a result, both the Hawks and the Doves reduce their desired production of guns by the same amount. Which party would get the bigger "peace dividend," measured by the increase in butter production? Explain.

Answer 2

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 9, Problem 9.1LO

To determine

What is economic growth and the importance of economic growth rates.

Expert Solution & Answer

Explanation of Solution

Economic growth rate refers to the rate at which the output of an economy increases overtime. It is used as an indicator of economic well-being of a nation. Economic growth is used as the most powerful instrument for reducing poverty and improving the standard of living of the residents of a country.

Thus, economic growth rates are important for the following reasons,

a. Helps in reducing poverty - Economic growth imply growth in income in an economy. As income in a country increases it leads to a reduction in poverty in the country. Further, it is ambiguous whether this increase in income will lead to an increase in income inequality or a reduction in it. If rise in income is evenly distributed among different sections then growth will lead to a reduction in inequality and vice versa.

b. Generation of employment - Economic growth generates new job opportunities. The increase in jobs leads to a rise in demand for labor which in turn leads to a rise in wages and salaries of working classes.

c. Improvement in living standards - Economic growth leads to vicious circle of prosperity and opportunity. Economic growth in one period will increase output and income in the other period which will in turn induce firms to expand and increase output further. In addition to this, increased income due to economic growth will induce families to invest in education and improve their skills. This will lead to a further development in availability of skilled labor in future.

Economics Concept Introduction

Introduction:

Economic growth rate refers to the rate at which the output of an economy increases overtime. It is used as an indicator of economic well-being of a nation.

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

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 9, Problem 9.1LO

To determine

What is economic growth and the importance of economic growth rates.

Expert Solution & Answer

Explanation of Solution

Economic growth rate refers to the rate at which the output of an economy increases overtime. It is used as an indicator of economic well-being of a nation. Economic growth is used as the most powerful instrument for reducing poverty and improving the standard of living of the residents of a country.

Thus, economic growth rates are important for the following reasons,

a. Helps in reducing poverty - Economic growth imply growth in income in an economy. As income in a country increases it leads to a reduction in poverty in the country. Further, it is ambiguous whether this increase in income will lead to an increase in income inequality or a reduction in it. If rise in income is evenly distributed among different sections then growth will lead to a reduction in inequality and vice versa.

b. Generation of employment - Economic growth generates new job opportunities. The increase in jobs leads to a rise in demand for labor which in turn leads to a rise in wages and salaries of working classes.

c. Improvement in living standards - Economic growth leads to vicious circle of prosperity and opportunity. Economic growth in one period will increase output and income in the other period which will in turn induce firms to expand and increase output further. In addition to this, increased income due to economic growth will induce families to invest in education and improve their skills. This will lead to a further development in availability of skilled labor in future.

Economics Concept Introduction

Introduction:

Economic growth rate refers to the rate at which the output of an economy increases overtime. It is used as an indicator of economic well-being of a nation.

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

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 9, Problem 9.1LO

To determine

What is economic growth and the importance of economic growth rates.

Expert Solution & Answer

Explanation of Solution

Economic growth rate refers to the rate at which the output of an economy increases overtime. It is used as an indicator of economic well-being of a nation. Economic growth is used as the most powerful instrument for reducing poverty and improving the standard of living of the residents of a country.

Thus, economic growth rates are important for the following reasons,

a. Helps in reducing poverty - Economic growth imply growth in income in an economy. As income in a country increases it leads to a reduction in poverty in the country. Further, it is ambiguous whether this increase in income will lead to an increase in income inequality or a reduction in it. If rise in income is evenly distributed among different sections then growth will lead to a reduction in inequality and vice versa.

b. Generation of employment - Economic growth generates new job opportunities. The increase in jobs leads to a rise in demand for labor which in turn leads to a rise in wages and salaries of working classes.

c. Improvement in living standards - Economic growth leads to vicious circle of prosperity and opportunity. Economic growth in one period will increase output and income in the other period which will in turn induce firms to expand and increase output further. In addition to this, increased income due to economic growth will induce families to invest in education and improve their skills. This will lead to a further development in availability of skilled labor in future.

Economics Concept Introduction

Introduction:

Economic growth rate refers to the rate at which the output of an economy increases overtime. It is used as an indicator of economic well-being of a nation.

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 9, Problem 9.1LO

To determine

What is economic growth and the importance of economic growth rates.

Expert Solution & Answer

Explanation of Solution

Economic growth rate refers to the rate at which the output of an economy increases overtime. It is used as an indicator of economic well-being of a nation. Economic growth is used as the most powerful instrument for reducing poverty and improving the standard of living of the residents of a country.

Thus, economic growth rates are important for the following reasons,

a. Helps in reducing poverty - Economic growth imply growth in income in an economy. As income in a country increases it leads to a reduction in poverty in the country. Further, it is ambiguous whether this increase in income will lead to an increase in income inequality or a reduction in it. If rise in income is evenly distributed among different sections then growth will lead to a reduction in inequality and vice versa.

b. Generation of employment - Economic growth generates new job opportunities. The increase in jobs leads to a rise in demand for labor which in turn leads to a rise in wages and salaries of working classes.

c. Improvement in living standards - Economic growth leads to vicious circle of prosperity and opportunity. Economic growth in one period will increase output and income in the other period which will in turn induce firms to expand and increase output further. In addition to this, increased income due to economic growth will induce families to invest in education and improve their skills. This will lead to a further development in availability of skilled labor in future.

Economics Concept Introduction

Introduction:

Economic growth rate refers to the rate at which the output of an economy increases overtime. It is used as an indicator of economic well-being of a nation.

Answer 6

Chapter 9, Problem 9.1LO

To determine

What is economic growth and the importance of economic growth rates.

Expert Solution & Answer

Explanation of Solution

Economic growth rate refers to the rate at which the output of an economy increases overtime. It is used as an indicator of economic well-being of a nation. Economic growth is used as the most powerful instrument for reducing poverty and improving the standard of living of the residents of a country.

Thus, economic growth rates are important for the following reasons,

a. Helps in reducing poverty - Economic growth imply growth in income in an economy. As income in a country increases it leads to a reduction in poverty in the country. Further, it is ambiguous whether this increase in income will lead to an increase in income inequality or a reduction in it. If rise in income is evenly distributed among different sections then growth will lead to a reduction in inequality and vice versa.

b. Generation of employment - Economic growth generates new job opportunities. The increase in jobs leads to a rise in demand for labor which in turn leads to a rise in wages and salaries of working classes.

c. Improvement in living standards - Economic growth leads to vicious circle of prosperity and opportunity. Economic growth in one period will increase output and income in the other period which will in turn induce firms to expand and increase output further. In addition to this, increased income due to economic growth will induce families to invest in education and improve their skills. This will lead to a further development in availability of skilled labor in future.

Economics Concept Introduction

Introduction:

Economic growth rate refers to the rate at which the output of an economy increases overtime. It is used as an indicator of economic well-being of a nation.

Answer 7

Chapter 9, Problem 9.1LO

To determine

What is economic growth and the importance of economic growth rates.

Answer 8

Expert Solution & Answer

Explanation of Solution

Economic growth rate refers to the rate at which the output of an economy increases overtime. It is used as an indicator of economic well-being of a nation. Economic growth is used as the most powerful instrument for reducing poverty and improving the standard of living of the residents of a country.

Thus, economic growth rates are important for the following reasons,

a. Helps in reducing poverty - Economic growth imply growth in income in an economy. As income in a country increases it leads to a reduction in poverty in the country. Further, it is ambiguous whether this increase in income will lead to an increase in income inequality or a reduction in it. If rise in income is evenly distributed among different sections then growth will lead to a reduction in inequality and vice versa.

b. Generation of employment - Economic growth generates new job opportunities. The increase in jobs leads to a rise in demand for labor which in turn leads to a rise in wages and salaries of working classes.

c. Improvement in living standards - Economic growth leads to vicious circle of prosperity and opportunity. Economic growth in one period will increase output and income in the other period which will in turn induce firms to expand and increase output further. In addition to this, increased income due to economic growth will induce families to invest in education and improve their skills. This will lead to a further development in availability of skilled labor in future.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Introduction:

Economic growth rate refers to the rate at which the output of an economy increases overtime. It is used as an indicator of economic well-being of a nation.

Answer 12

Ch. 9 - Prob. 9.1LO Ch. 9 - Prob. 9.2LO Ch. 9 - Prob. 9.3LO Ch. 9 - Prob. 9.4LO Ch. 9 - Prob. 9.5LO Ch. 9 - Prob. aFCT Ch. 9 - Prob. bFCT Ch. 9 - Prob. cFCT Ch. 9 - Prob. dFCT Ch. 9 - Prob. 1CTQ

What is economic growth and the importance of economic growth rates.

What is economic growth and the importance of economic growth rates.

Explanation of Solution

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