Question 1

Explain the four basic points of the anti-growth argument.

Accepted Answer

First, they argue that any measure of output measures only the value of things exchanged in the market. Second, they argue that growth occurs because wants are created. This relegates consumers to the status of servants rather than the masters of the economy. Third, they assert that resources are finite and that we should plan for the future when growth will be impossible. Lastly, they state that growth requires that income be distributed unfairly.

Question 2

Refer to the information provided in the figure below to answer the questions that follow.
  
-Using the figure above, answer the following question. If the economy is currently at point D explain with the use of the graph what would be an example of economic growth.

Accepted Answer

An example of economic growth would be a movement from point D to point A or B on PPF or point C on PPF .

Question 3

-Using the table above, compute the measured labor productivity and fill in the empty cells. What can you say about the returns to capital?

Accepted Answer

The returns to capital are diminishing. Notice that by adding ten more units of capital output rises from 600 to 620 (a change of 20), but when we add ten more units of capital output only rises from 620 to 638 (a change of only 18 units).

Question 4

-Use the above graph to answer the following question. If the economy is operating at point D what would be an illustration of an increase in productivity?

Accepted Answer

An increase in produ

Question 5

What is modern economic growth?

Accepted Answer

Modern growth is the period of

Question 6

Refer to the information provided in the figure below to answer the questions that follow.
  
-Using the figure above, answer the following question. If the economy is currently at point C, explain with the use of the graph what would happen if there was an economic decline.

Accepted Answer

An example of econom

Question 7

Define external economies of scale.

Accepted Answer

Economies of scale are cost savings that

Question 8

Explain how an economy can grow without increases in the labor force and physical capital.

Accepted Answer

Increases in productivity allo

Question 9

Related to the Economics in Practice on p. 332 [644]: Why are productivity changes underreported?

Accepted Answer

Productivity changes

Question 10

If the aggregate production function is Y = 5K.5L.5 . If there are 49 units of capital and 16 units of labor, calculate the aggregate output. Show your work.

Accepted Answer

The square root of 49 is 7. Th

Question 11

Define economic growth.

Accepted Answer

Economic growth is an increase

Question 12

Define labor productivity.

Accepted Answer

Labor productivity is output p

Question 13

In Polynomia, real GDP increased by 8% and the population increased by 3% in 2008. What can we say about economic growth and the standard of living for this country?

Accepted Answer

We can say that econ

Question 14

What is embodied technological change? Provide an example.

Accepted Answer

Technical change that results in an impr

Question 15

-Use the above graph to answer the following question. If the economy is operating at point D what would be an illustration of an increase in the labor force?

Accepted Answer

An increase in the labor force

Question 16

List at least five policies that have either been suggested or have been enacted into law to increase the rate of economic growth in the United States.

Accepted Answer

Improving the quality of educa

Question 17

Edward Denison did a study on economic growth in the U.S. extending from 1929 to 1982. What were his two principle conclusions about where the growth came from?

Accepted Answer

Denison estimated that about h

Question 18

Explain how an increase in the stock of capital can increase output even if it is not accompanied by an increase in the labor force.

Accepted Answer

Physical capital enhances the

Question 19

Explain the difference between an invention and an innovation. Provide an example of an invention and an innovation.

Accepted Answer

An invention is an advance in knowledge.

Question 20

What is the aggregate production function?

Accepted Answer

It is the mathematical represe

Exam 17: Long-Run Growth

Explain the four basic points of the anti-growth argument.

Refer to the information provided in the figure below to answer the questions that follow. -Using the figure above, answer the following question. If the economy is currently at point D explain with the use of the graph what would be an example of economic growth.

-Using the table above, compute the measured labor productivity and fill in the empty cells. What can you say about the returns to capital?

-Use the above graph to answer the following question. If the economy is operating at point D what would be an illustration of an increase in productivity?

What is modern economic growth?

Refer to the information provided in the figure below to answer the questions that follow. -Using the figure above, answer the following question. If the economy is currently at point C, explain with the use of the graph what would happen if there was an economic decline.

Define external economies of scale.

Explain how an economy can grow without increases in the labor force and physical capital.

Related to the Economics in Practice on p. 332 [644]: Why are productivity changes underreported?

If the aggregate production function is Y = 5K.5L.5 . If there are 49 units of capital and 16 units of labor, calculate the aggregate output. Show your work.

Define economic growth.

Define labor productivity.

In Polynomia, real GDP increased by 8% and the population increased by 3% in 2008. What can we say about economic growth and the standard of living for this country?

What is embodied technological change? Provide an example.

-Use the above graph to answer the following question. If the economy is operating at point D what would be an illustration of an increase in the labor force?

List at least five policies that have either been suggested or have been enacted into law to increase the rate of economic growth in the United States.

Edward Denison did a study on economic growth in the U.S. extending from 1929 to 1982. What were his two principle conclusions about where the growth came from?

Explain how an increase in the stock of capital can increase output even if it is not accompanied by an increase in the labor force.

Explain the difference between an invention and an innovation. Provide an example of an invention and an innovation.

What is the aggregate production function?

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

The Money Supply and the Federal Reserve System

Money Demand and the Equilibrium Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Costs Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing and Transitional Economies

Filters

If the aggregate production function is Y = 5K^.5L^.5 . If there are 49 units of capital and 16 units of labor, calculate the aggregate output. Show your work.