Exam 3: An Overview of Long-Run Economic Growth

One of the nice properties of the rule of 70 is that it simply approximates how long it takes for a variable to double independent of the level of the variable.

Assuming the current rate of economic growth continues, the average parent of a college student will have a lifetime income twice that of his or her son or daughter.

If x grows at 3 percent and y grows at -2 percent and w = x/y, then w grows at 5 percent.

Suppose k, l, and A grow at constant rates given by $\bar { g } _ { k }$ ' $\bar {g } _ { y }$ and $\bar { g } _ { A }$ ' The growth rate of y if $y = A k ^ { a } l ^ { ( 1 - a ) }$ is $\bar { g } _ { y } = \bar { g } _ { A } + a \bar { g } _ { k } + ( 1 - a ) \bar { g } _ { i }$ ,

The president of the World Bank has asked you to calculate the average population growth rate of Nigeria from 1960 to 2010. You know the population in 1960 was about 42 million and in 2010 about 152 million. The average growth rate is about:

According to the constant growth rate rule, if a variable starts at some initial value y₀ at t = 0 and grows at $y _ { t } = y _ { 0 } ( 1 + \bar { g } ) ^ { t }$ at a constant rate $\bar { g } ,$ Then the value of the variable in three periods is given by:

What are the "stylized facts" of Japan's growth experience over the past 150 years or so?

Suppose population growth is given by $L _ { t } = L _ { 0 } ( 1 + \bar { n } ) ^ { t }$ , where L₀ is the population today, $L _ { t }$ Is the population in t periods, and $\bar { n }$ Is the population constant growth rate. If we do not know what value $\bar { n }$ Takes but do know the values of L₀, $L _ { t }$ , and t, we can calculate $\bar { n }$ By punching ________ into our calculator.

Defining per capita GDP in 2013 as y₂₀₁₃ and per capita GDP in 2014 as y₂₀₁₄, the growth rate of per capita GDP, $\bar { g }$ , from 2013 to 2014 is given by:

Suppose k, l, and A grow at constant rates given by $\bar { g } _ { k }$ $\bar { g } _ { y }$ , And $\bar { g } _ { A }$ ` What is the growth rate of y if $y = A k ^ { a } l ^ { 1 - a } , a > 0 ?$

Assume that both Mexico's and Argentina's average annual per capita GDP growth rates are 3 percent per year, and both countries began with an initial per capita GDP of $1,000. However, Argentina has been growing since 1935 and Mexico only since 1960. In 2010, Mexico's per capita GDP would have been about ________, while Argentina's would have been about ________.

A benefit of economic growth is the expansion in the variety of goods and services available to individuals.

What country or countries do the following characteristics possibly describe? • Life expectancy at birth is under 50 years. • More than 90 percent of households do not have electricity. • Fewer than 10 percent of young adults have graduated from high school.

In 2005, prices adjusted for inflation; the U.S. per capita GDP was about ________ in 1870, and by 2012 it had grown to about ________.

Let $Y = A K ^ { \frac { 1 } { 3 } } L ^ { - \frac { 2 } { 3 } }$ If $\bar { g } _ { A } = 1 \%$ , $\bar { g } _ { X } = 3 \%$ , and if $\bar { g } _ { L } = 6 \% ,$ then $\bar { g } _ { Y } = 6 \%$ ,

The president of the World Bank is on his way to a meeting with the president of Uruguay. He bumps into you in the hallway and wants to know how long it will take for Uruguayan per capita GDP to double. All he knows is that the average growth rate has been about 1 percent. You quickly tell him it will take about ________ years because you know ________.

The costs of economic growth include which of the following?

When a lower-income economy's GDP is able to "catch up" with a higher-income economy's GDP, this behavior is related to an important concept in the study of economic:

If the population of Romania was about 22 million in 2010 and the average population growth rate is 0.2 percent, then Romania's "initial" population was about ________ in 1970.

Assume that both Japan's and the United States' average annual per capita GDP growth rates are 2 percent per year, and both countries began with an initial per capita GDP of $1,000. However, the United States has been growing since 1910 and Japan only since 1960. In 2010, the United States would have been ________ than Japan.