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Ch. 7 condensed ppt - output growth The growth rate of the...

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output growth The growth rate of the real output of the entire economy, ie. The real GDP growth rate per-capita output growth The growth rate of output per person in the economy. Standard of Living= GDP/person or “per capital output” What determines the Long-term/trend growth rate of gdp? Where do you get more output? -more workers -more output/worker Def. Labor productivity: output/hour worked Def. Potential gdp A supply concept which attempts to measure what the economy would produce if all its resources were “fully utilized” taking as given: Existing tech. Capital stock Natural resources Education of nation’s labor force Existing institutional arrangements “Fully utilized” = unemployment of 5% What causes productivity to grow faster? (1) Investment in More Physical Capital (equipment, structures, book calls “machines”) (2) Investment in Better Equipment (R&D,research & development required in developed countries) (3) Investment in Workers (Human Capital), How? More Education Better Training (on the job training) Health Care Childcare programs, etc. (4) Deregulation (5) Better Management If Politician Says he wants U.S. GDP to grow faster over the long term, ask him how he is going to do what? (1) Raise productivity growth (2) Raise labor force growth Population Survey—65,000 person sample of households each month across the U.S. employed Any person 16 years old or older (1) who works for pay, either for someone else or in his or her own business for 1 or more hours per week; (2) who works without pay for 15 or more hours per week in a family enterprise; or (3) who has a job but has been temporarily absent, with or without pay. unemployed A person 16 years old or older who is not working, is available for work, and has made specific efforts to find work during the previous 4 weeks not in the labor force A person who is not looking for work, because he or she either does not want a job or has given up looking.
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labor force = employed + unemployed unemployment rate The ratio of the number of people unemployed to the total number of people in the labor force.
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