Chapter 9 Self-Review

Chapter 9 Self-Review - The greater the rewards the more...

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Chapter 9 Self-Review 01/04/2008 02:18:00 Economic Growth     : Increases in per capita real GDP measured by its rate of  change per year Costs/Benefits of Economic Growth     : Costs: o Environmental pollution o Breakdown of the family o Isolation and alienation o Urban congestion Benefits o Reduction in illiteracy o Reduction in poverty o Improved health o Longer Lives o Political stability Labor Productivity: Total real GDP divided by the # of workers To have more consumption in the future, you have to consume less today and save the  difference between your consumption and your income. Higher savings rate eventually mean higher living standards in the long run Need growth theory: a theory of economic growth that examines the factors that  determine why technology, research, innovation, and the like are undertaken and how  they interact. Technology can be considered a separate factor of production
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Unformatted text preview: The greater the rewards, the more technological advances we will get. Determinants of economic growth: • Innovation and knowledge • Ideas and Knowledge Economic growth can continue as long as we have new ideas • Human Capital • Property Rights • Immigration and Population ← ← Development Economics: the study of factors that contribute to the economic growth of a country. ← Keys to Economic Development • Establish a system of property rights o More secure private property rights there are, the more private capital accumulation there will be. • Develop an educated population • Let “creative destruction” run its course o New business create economic growth after first destroying old jobs, companies, and industries • Limit protectionism o Open economies experience faster economic development ←...
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This note was uploaded on 11/13/2008 for the course ECON 205 taught by Professor Kamrany during the Spring '07 term at USC.

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Chapter 9 Self-Review - The greater the rewards the more...

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