ECON1002 Introductory Macroeconomics, S2 2010
: Review Pages 342–373 of BOF as preparation for this tutorial. You
should also look over your lectures notes for Week 9.
HE FOLLOWING SHORT ARTICLES
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
These are to be attempted before the tutorial. They will
not normally be covered
the tutorial, maybe, except for a quick review, time permitting. The answers are
typically found in the textbook and lecture notes.
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
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!)
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