Economic - Final Review Questions

Economic - Final Review Questions - Growth: define - How...

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Growth: define - How fast would we want the economy to grow = 2/3% o If growth is too fast there will be a shortage of resources (mainly labor), that would create inflation and that in turn would slow down the economy o If it grows too slowly then unemployment would increase because not enough firms need additional workers - Why do developing countries have a faster economic growth than what we would like to see for the US? Statistically it is easier to grow faster when you have a lot of idle resources, introduction of technology to speed up growth. A developed country will have already applied most of that innovation so faster rates of growth are more difficult to achieve. - Why is it good to grow? o Employment, jobs ( more income and more consumption thus more growth) o Standard of living – happier citizens, more money for savings and more R&D, innovation, new goods o Stability both in country and globally - Negative effect of growth : o Pollution o Materialistic approach - If growth is too fast then you will have inflation (see above) if too slow then unemployment will rise GDP= 2 ways of calculating the GDP 2 tools that we use to influence the economy: - Fiscal policy . Check today’s fiscal policy moves (applied macroeconomics). It is humorous to see the difference in statistical data from the time this video was
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This note was uploaded on 11/14/2011 for the course ECON 220 taught by Professor Ramoo during the Fall '10 term at Diablo Valley College.

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Economic - Final Review Questions - Growth: define - How...

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