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EXTRA CHP 8
| Question | Answer |
|---|---|
| Economic is defined as an increase | in real GDP/real GDP per capita overtime |
| Widely held economic goal: | Growth as it lessens the burden of scarcity(consume more today while producing more in the future) |
| Growth reasons | Improve products and services/Added leisure/Other impacts |
| Economic growth started | in the Industrial revolution when James Watt(Scottish) perfected an efficient steam engine in 1776 |
| Modern economic growth has deeply affected | Cultural/social/political arrangements |
| There is an Uneven | distribution of Growth |
| economic growth-promoting institutional structures: | Strong property rights/Patents and copyrights/Efficient financial institutions/Literacy and widespread education/Free trade/a competitive market system 6 main ones(there are others) |
| Demand Factor is used to get | on the ppc |
| Demand factor happens when firms/gov | expand their purchases of goods/services so as to provide a market for all the new output of its potential |
| Efficiency Factor | Max satisfication and utility of scarce resources through full employment/economic efficiency(optimal point) |
| Production Possibilities Analysis | Considers all 6 factors |
| Growth/expansion of ppc comes from | supply factors |
| Labor inputs | Employees plus average hours of work |
| Labor productivity | Tech + Capital quantity + Edu + Allocative efficiency + Other |
| Growth accounting assesses | increase in hours of work and labor productivity |
| Tech advances | 40% of productivity |
| Quantity of Capital per worker | 30% of productivity |
| Education/Training | 15% of productivity |
| Improved resource allocation | move workers from low to high productivity emploment(also comes from decreases in discrimination and tarrifs) |
| Core element of productivity speedup btw 1995-2010 | microchip/microprocessor |
| Sources of increasing returns: | More specialized inputs(trained workers), Spreading of developments costs over greater output(sell more), Simultaneous consumption(app needs to be created once to become popular), Network effects, learning by doing |
| increasing economy in 1995-2010 was also due to | increasing global competition. |
| Higher growth rates = | larger outward shift in ppc |
| Recent slow of growth could be due to | High debt levels, overcapacity of equipment and production, Inernet apps don't generate measurable effects on GDP, tech progressed has stalled |
| Antigrowth view | growth = pollution/environmental problems/more social problems like poverty/not sustainable growth |
Created by:
MathMatt
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