Tutorial 9_2010 _answer_

Tutorial 9_2010 _answer_ - ECON1002 Introductory...

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ECON1002 Introductory Macroeconomics, S2 2010 Tutorial Tasks 1 Reading Guide : Review Pages 342–373 of BOF as preparation for this tutorial. You should also look over your lectures notes for Week 9. T HE FOLLOWING SHORT ARTICLES ( AVAILABLE THROUGH B LACKBOARD ) ARE ALSO RECOMMENDED TO DEEPEN YOUR UNDERSTANDING OF ECONOMIC GROWTH . South Korea: How to Keep the Miracle Going ’ by Robert Barro, Economic Viewpoint, Business Week , June 9, 2003. Another day, another $1.08 ’, Economics Focus, The Economist , April 26 th , 2007. K EY C ONCEPTS : E CONOMIC G ROWTH ; G ROWTH R ATES ; S OURCES OF G ROWTH ; C OSTS AND B ENEFITS OF G ROWTH ; P RODUCTION F UNCTIONS . R EVIEW OF C ONCEPTUAL U NDERSTANDING These are to be attempted before the tutorial. They will not normally be covered in the tutorial, maybe, except for a quick review, time permitting. The answers are typically found in the textbook and lecture notes. 1. BOF, page 371, Review Questions 1, 2. 1. Since 1870 real GDP per person has grown more than tenfold in many industrial countries; and by 25-fold in Japan. These large increases in output per person have led to substantial increases in the material standard of living of the average person. 2. Real GDP per person (a basic determinant of living standards) equals average labour productivity times the share of the population that is employed. The share of the population that is employed can only rise so far; it can never exceed 100%. Thus, large long-term gains in output per person (and hence living standards) generally must come from increases in average labour productivity. (What we can consume depends on what we can produce!) 2. BOF, page 371, Review Question 6, 7. 6. Among the policies that governments can use to promote growth are encouraging the development of human capital (for example, by supporting education); encouraging high rates of saving and investment (for example, through tax breaks); public investment in infrastructure (such as highways, bridges and communications networks); and support of basic research. A T UTORIAL 9 (Week 10: beginning 5 h October)
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This note was uploaded on 12/14/2010 for the course ECON 1002 taught by Professor Markmelatos during the Three '10 term at University of Sydney.

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Tutorial 9_2010 _answer_ - ECON1002 Introductory...

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