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Macro Section
Macro Section 11-12,19
| Question | Answer |
|---|---|
| Which century proved to be more prosperous in terms of growth for some nations than for others? | The twentieth century |
| When did the United States and Europe had a much higher per capita income than rest of the world? | By 2000 |
| Which resource is likely to have contributed to South Korea’s rapid economic growth? | each resource or factor of production has been vital to the rapid economic growth experienced since 1950. |
| What is true regarding world economic growth rates for the different historical eras? | The world became wealthier in each of the historical eras as world income grew a little bit each year. Thus, small differences in growth rates led to large differences in wealth levels over time. |
| What has helped China achieve its 4.93% average growth rate over the past 50 years? | Private Property rights |
| At a growth rate of 0.64%, average per capita real GDP would double in how many years? | 109 years. |
| At a growth rate of 0.02%, average per capita real GDP would double in how many years? | 3,500 years. |
| At a growth rate of 1.04%, average per capita real GDP would double in how many years? | 67 years |
| a growth rate of 2.12%, average per capita real GDP will double in how many years? | 33 years |
| Which country has almost no natural resources and agriculture of its own, has one of the world’s lowest unemployment rates, a literacy rate of 96%, a per capita GDP of over $35,000, and one of the densest populations per square mile on the planet? | Singapore |
| Whay was there was slower economic growth before the Industrial Revolution? | technological innovations were always followed by population growth |
| why are technological innovations often clustered in particular locations | because of institutions that foster economic growth because of concentrations of capital in those locations |
| According to the modern growth theory, the low living standards in many developing countries can be explained by a lack of what? | significant organizations, laws, and social mores in society, institutions that frame the incentive structure within which individuals and businesses make decisions. |
| What does not result in economic growth? | an increase in population, if the population of a country increases, then per capita GDP will decrease. |
| How do institutions affect real GDP | efficient institutions shift aggregate production to the right and increases real GDP and vice versa |
| If output increases from 10 to 16, what is the marginal product? | 6 |
| When does diminishing marginal product start? | when a second input |
| What was proposed by the modern growth theory? | The new growth theory explained why technological advance, the main driver of sustained growth, occurs in certain nations in contrast to others. Technological change is endogenous, that is, caused by factors inside the economy. |
| What is considered physical capital? | buildings, tools, and equipment |
| If building new capital is costless and the capital depreciation rate is zero, then an economy will reach a steady state, what will the marginal product of capital be? | zero |
| What does economic growth depend on? | a combination of resources, technology, and institutions. |
| What are common reasons for trade being restricted? | Some countries will want to ensure that products are produced within their own borders for reasons of national defense. |
| What is a trade deficit? | imports exceed its exports. |
| Who does U.s have the largest trade with? trade balance with? | China, U.K. |
| How are quotas and tariffs typically applied to restrict international trade? | Tariffs are taxes levied on imported goods or services. Quotas are limits on the quantity of products that can be imported. Both taxes and quotas can serve to restrict trade equivalently. |
| What is a benefit of international trade? | International trade increases standard of living because it allows people to obtain some products from other countries less expensively than if those products were produced domestically |
| What areas of tariff/quota graph equal deadweight loss? | Areas A and B together represent the deadweight loss due to the quota. |
| Mangolia: 1 mango = 2 cans of sardines Sarde: 1 mango = 4 cans of sardines Would a trade of 2 mangoes = 3 cans of sardines be acceptable to both nations? | 1 mango would cost 1.5 cans of sardines. Mangolia is selling 1 mango for the cost of 2 cans so it would not sell a mango for 1.5 sardines. Sarde is selling 1 can of sardine for .25 a mango. The trade sells sardine for .33 a mango so Sarde would trade. |
| What is a disadvantage of trade restrictions? | Does not maximize combined output of trade (deadweight loss) |
| If a country produces on the PPF is is producing.. | efficiently |
| How do you find the equilibrium price for international and domestic trade? | To find the equilibrium price with trade, we look for where the quantity demanded equals the sum of the quantity supplied domestically and the quantity imported |
Created by:
v.virgil
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