Econ Exam Notes - 1 To calculate how long it will take GDP...

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1. To calculate how long it will take GDP per capita to double, divide the number 70 by the annual growth rate 2. Adam Smith’s theory of scale of the market suggests that the size of a market is important for economic development 3. Joseph Schumpeter’s theory of creative destruction suggests that firms will try to innovate to earn higher profit 4. The organization that officially dates recessions is the National Bureau of Economic Research 5. The largest component of national income is compensation of employees (wages and benefits) 6. The government department that produces the national income and product accounts is the Department of Commerce 7. Natural rate of unemployment consists of frictional and structural unemployment 8. The chain-weighted price index for GDP does not include used goods or imported goods 9. Creditors do not gain from unanticipated inflation 10. Robert Solow- Technological progress 11. Saving and depreciation are the two factors that determine how the stock of capital changes over time 12. New growth theory suggests that investment in comprehensive education in a developing country will lead to permanent increases in the rate of technological progress 13. Gross investment is the total amount of new private investment purchases
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This note was uploaded on 01/12/2012 for the course ECON 102 taught by Professor Drozd during the Fall '08 term at University of Wisconsin.

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Econ Exam Notes - 1 To calculate how long it will take GDP...

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