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ECON2105_Ch7

# ECON2105_Ch7 - ECON2105_Ch7 CHAPTER 7 PRODUCTION AND GROWTH...

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ECON2105_Ch7 CHAPTER 7: PRODUCTION AND GROWTH Let’s begin with some definitions: 1. Per Capita Income 2. Per Capita GDP 3. Growth Rate of GDP where we multiply the expression in brackets by _______ to express the growth rate as a percentage Examples 1. Real GDP in Macroland in 2000 was \$100,000. Its population was 100. Calculate its per capita real GDP. 2. In the year 2001, per capita real GDP in Macroland was \$1,050. Use this information and your calculation from the first example to calculate the growth rate of real GDP. Per capita income and per capita real GDP give an estimate of the standard of living or the material well-being of a “typical citizen” in a country. The growth rate in the above variables is an estimate of the progress that an economy is making. Data suggest that 1. Living standards _________________________________________________ 2. due to different growth rates, rankings of nations by per capita income (or per capita real GDP) change over time. (a) Late 1800s - _____________________________________ was the richest nation (b) Today - ________________________________ all have higher per capita real GDP (c) ________________________ probably had the fastest growth rate since 1890.

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ECON2105_Ch7 - ECON2105_Ch7 CHAPTER 7 PRODUCTION AND GROWTH...

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