Chapter 25 Questions

Chapter 25 Questions - education free trade competitive...

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Lisa Mauro Economics 2013 October 25, 2010 1. 1. Why is economic growth important? It makes it better to able to meet’s wants and needs of the population. 2. Why could the difference between a 2.5% and a 3% annual growth rate be of great significance over several decades? It enables the rate of doubling money shorter and would allow countries a faster rate of return at a higher return. 2. What is the growth rate of its real GDP? Year 1 ~ $30,000 / 100 = $300, Year 2 ~ $31,200 / 102 = $305.88 What is the growth rate of real GDP per capita? 4% ~ ((31,200-$30,000)/30,000)*100 3. 1. When and where did modern economic growth first happen? Started in 1776 with the industrial revolution. 2. What are the major institutional factors that form the foundation for modern economic growth? Strong property rights, patents and copyrights, efficient financial institutions, literacy and widespread
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Unformatted text preview: education, free trade, competitive market system 3. What do they have in common? The growth and spending of money to make our nation move forward 5. 1. What are the four supply factors of economic growth? Increases in the quantity and quality of natural resources, Increases in the quantity and quality of human resources, increases in the supply (or stock) of capital goods, Improvements in technology 2. What is the demand factor? To achieve the higher production potential created by the supply factors, households, businesses, and government must purchase the economy’s expanding output of goods and services 3. What is the efficiency factor? To reach its full production potential, an economy must achieve economic efficiency as well as full employment 4. Illustrate these factors in terms of the production possibilities curve:...
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This note was uploaded on 02/25/2011 for the course ECON 1 taught by Professor Young during the Fall '10 term at Edison State College.

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