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econ3 8-1

# econ3 8-1 - Ch.8(economic growth Economic growth o a...

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2-6-08 Ch.8 (economic growth) - Economic growth o a sustained expansion of production possibilities measured as the increase in real GDP over a given period nominal might just change - economic Growth Rate o annual percentage change in real GDP o Economic Growth Rate = (Real GDP2007 – Real GDP 2006) / (Real GDP 2006) Real GDP 2007 = \$11567.3 bil Real GDP 2006 = \$11319.4 bil (11567.3 – 11319.4) / (11319.4) = .0219 = 2.19% o How many people were there? Interested in GDP per person - Per capita Real GDP o Real GDP divded by the population o Also known as Real GDP per person Real GDP 2007 = 11567.3 bil Real GDP 2006 = 11319.4 bil Population 2007 = 301.6 mil Population 2006 = 298.8 Real GDP per person 2007 = 11567.3 bil / 301.6 mil = 38353.12 Real GDP per person 2006 = 11319.4 bil / 298.8 mil – 37882.86 Change in population is .94%

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Real GDP from previous is 2.9 % Change per person is about 1.24% Change in GDP – Change in population = 1.24% o Real GDP growth – population growth = growth of real GDP per person - Rule of 70 o The number of years it takes for the level of variable to double is 70 / annual percentage growth rate of variable.
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