Chapter_16W_Key_Question_Solutions

Chapter_16W_Key_Question_Solutions - 16W-3(Key Question...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
16W-3 ( Key Question ) Assume a DVC and an IAC presently have real per capita outputs of $500 and $5,000 respectively. If both nations have a 3 percent increase in their real per capita outputs, by how much will the per capita output gap change? Rise in per capital output gap = $135 (= 3% x $5,000 - 3% x $500). 16W-5 ( Key Question ) Contrast the demographic transition view of population growth with the traditional view that slower population growth is a prerequisite for rising living standards in the DVCs. Demographic transition view: Expanded output and income in developing countries will result in lower birthrates and slower growth of population. As incomes of primary family members expand, they begin to see the marginal cost of a larger family exceeding the marginal benefit. The policy emphasis should therefore be on economic growth. Traditional view: Developing nations should reduce population growth as a first priority. Slow population growth enables the growth of per capita income.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/14/2010 for the course ECON 1 taught by Professor Bergstrom during the Fall '07 term at UCSB.

Ask a homework question - tutors are online