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Mathematical Excursions
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Chapter 4 / Exercise 25
Mathematical Excursions
Aufmann
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Advanced Placement Economics Macroeconomlcs: Student Resource Manual © Council for Economic .Education, New York, N.Y.203.I •kl ii'i •'i%i :,!i*!:i:5 ".',..-*i:i),31 '.,!i't ¢,-,i b•ii 'i:!..; .;:Pii•;!41,:11! •,ÿI i!7 i.i / I')-:.. ,q, .lp$i:+.?',t L?ii••!'.:3"',iI ] I * ,11[ t.."!!-d
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Mathematical Excursions
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Chapter 4 / Exercise 25
Mathematical Excursions
Aufmann
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Measuring Economic Growth in Hamilton County and Jefferson County1. Use Table 6-2.1 to fÿ out Tables 6-2.2, 6-2.3, and 6-2.4. Recall that a percentage change is equal tothe change divided by the starting value.Table 6-2.1Year1234Hamiltonreal GDP$2.1 billion$2.5 billion$2.8 billion$2.7 billionHamilton/,populatioÿ70,00080,00090,00086,000Jeffersonreal GDP$500,000$525,000$600,000$650,000Jeffersonpopulation15161718Table 6-2.2.1Time periodFrom Year 1 to Year 2From Year 2 to Year 3From Year 3 to Year 4Hamilton% change in real GDPJefferson% change in real GDPTable 6-2.3Year1234Hamiltonper capita real GDPJ effersonper capita real GDPTable 6-2.4Time periodFrom Year 1 to Year 2From Year 2 to Year 3From Year 3 to Year 4rHamilton% change in per capita real GDPJefferson% change in per capita real GDP204 Advanced Placement Economics lvFacroeconomics: Student Resource Manual © Council for Economic Education, New York, N,Y.
2, When did Hamilton County experience the largest growth in real GDP?(A) When did Hamilton County experience the largest growth in per capita real GDP?(B) Why are these growth rates different?3. When did Jefferson County experience the largest growth in real GDPÿ. (A) When did Jefferson County experience the largest growth in per capita real GDP? (B) Why are these growth rates different? 4. Which county do you believe is better oÿ Explain.Analyzing Economic Growth5. Economic growth can be illustrated using both the LRAS curve and the PPC. Use the followinggraphs to illustrate economic growth._JUJ..J111oK:nREAL GDPCONSUMPTION GOODScOCI00.J<O.,<0"! I i'". 'i iil 'i,Advanced Placement Economics Macroeconomics" Student Resource Manual © Counci[ for Economic Education New York, N Y. 205
Policies to Promote Economic GrowthA country experiences economic growth if it has increased its long-run ability to produce goods andservices, no matter the current short-run phase of the nation's business cycle. Recall that short-runfluctuations in the business cycle are caused by changes in either aggregate demand or short-runaggregate supply. These short-run changes lead/to increases, or decreases, in real gross domesticproduct (GDP). However, these changes are movements around the long-run stability of full-employment GDP. So another way to think about economic growth is to consider the level of real GDPwhen the nation is at ful! employment. If this level of full-employment output, as seen by the locationof the long-run aggregate supply curve in Figure 6-3.1, is increasing, the nation is experiencing realgrowth.'!ffÿ'::illiiÿi:I:1.I.Y[.,i'.i'"I:ii!,,Using the production possibilities model, economic growth is shown as an outward movement of theproduction possibilities curve, as shown in Figure 6-3.1. This allows a nation to produce combinations ofgoods and services that were previously unattainable, given the nation's stock of resources and technology.

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