The economic growth and the importance of economic growth rates. Concept information: 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.

Question

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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

The economic growth and the importance of economic growth rates.

Concept information:

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.

Expert Solution & Answer

Explanation of Solution

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:

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.

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.

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.

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Consider the table below, which has data on insurance status and medical expenditures for different types of professors at Hypothetical University (HU), economics & criminology professors. Assume that there are an equal number of economics and criminology professors. Assume further that econ professors all have the same level of health and criminology professors all have the same level of health. There is evidence of 2021 Insured? Avg. Expenditures Insured? Avg. Expenditures 2020 Economics Professors Criminology Professors Yes. Yes $25,000 $15,000 0000 ??? ??? $28,000 $10,000 I. moral hazard because in 2021 criminology professors dropped their coverage and health expenditures went down. II. adverse selection because in response to rising premiums after 2020, the professors with lower health expenditure dropped coverage Both I and II neither I nor II

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

The economic growth and the importance of economic growth rates.

Concept information:

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.

Expert Solution & Answer

Explanation of Solution

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:

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.

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.

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.

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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

The economic growth and the importance of economic growth rates.

Concept information:

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.

Expert Solution & Answer

Explanation of Solution

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:

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.

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.

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.

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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

The economic growth and the importance of economic growth rates.

Concept information:

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.

Expert Solution & Answer

Explanation of Solution

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:

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.

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.

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.

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Answer 5

Chapter 9, Problem 9.1LO

To determine

The economic growth and the importance of economic growth rates.

Concept information:

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.

Expert Solution & Answer

Explanation of Solution

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:

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.

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.

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 6

Chapter 9, Problem 9.1LO

To determine

The economic growth and the importance of economic growth rates.

Concept information:

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.

Expert Solution & Answer

Explanation of Solution

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:

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.

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.

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 7

Chapter 9, Problem 9.1LO

To determine

The economic growth and the importance of economic growth rates.

Concept information:

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 8

Expert Solution & Answer

Explanation of Solution

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:

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.

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.

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.