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Unformatted text preview: .. 4. Manufacturing sector. Good because increased productivity. Manufactured goods are of lower cost. 5. a. Faster growth in the short run. b. Might be a transition when consumption-good industries get lower incomes, and investment-good industries get higher incomes. 6. a. Consumption: food, clothes; investment: houses. .. b. Consumption: salaries to clerks; investment: building roads 7. Loss of (current) consumption. A country can "over-invest" in capital. A country could "over-invest" in human capital. 8. a. Foreign direct investment. b. Increases Canadian GDP. The effect on Canadian GNP would be smaller. 9. a. Made our capital stock larger. 117 F Chapter 7/Production and Growth b. Canada would have received full returns on the investment itself. 10. Increased human capital Lower population growth. . 11. GDP 2030 = 1,000(1+0.035) 25 = 2,363 million GDP 2030 = 1,000(1 +0.040) 25 = 2,666 million...
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- Winter '08