Macro Ch. 6 HW
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Macro Ch. 6 HW

Course Number: ECON 2010, Spring 2013

College/University: Northeast State

Word Count: 1268

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Izzy Leonard Macroeconomics Chapter 6: Questions: 3 & 4 Problems: 3 http://www.census.gov/ February 21, 2013 Professor Loving 3) Consider a nation in which the volume of goods and services is growing by 5 percent per year. What is the likely impact of this high rate of growth on the power and influence of its government relative to other countries experiencing slower rates of growth? What about the effect of...

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Izzy Leonard Macroeconomics Chapter 6: Questions: 3 & 4 Problems: 3 http://www.census.gov/ February 21, 2013 Professor Loving 3) Consider a nation in which the volume of goods and services is growing by 5 percent per year. What is the likely impact of this high rate of growth on the power and influence of its government relative to other countries experiencing slower rates of growth? What about the effect of this 5 percent growth on the nations living standards? Will these also necessarily grow by 5 percent per year, given population growth? Why or why not? Answer: If a countrys economic size is growing faster than the rest of the world then this country will gain influence in the international sector. China is a classic example of this phenomenon in the last decade. This is because a greater share of the worlds goods and services are produced in this country. If a countrys living standards are increasing at 5%, this implies that output is increasing at a rate of 5% above population growth. If this rate of growth is greater than that in other countries, political influence will increase as well. 4) Did economic output start growing faster than population from the beginning of the human inhabitation of the earth? When did modern economic growth begin? Have all of the worlds nations experienced the same extent of modern economic growth? Answer: No, rapid and sustained economic growth is a modern phenomenon.

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