Deck 8: Economic Growth

Question 1

What are some of the positive changes associated with modern economic growth?

Answer 1

Significant growth in GDP per capita has brought with it major changes including:
• additional leisure time so that "ordinary" people can enjoy art,"culture" and leisure activities,
• social improvements including universal public education,decreased discrimination,and improved access to healthcare,
• a shift towards greater democracy,and
• a longer lifespan over which these benefits can be enjoyed.
Of course there are a lot of other examples.

Question 2

How might poorer nations catch up to richer countries in terms of GDP per capita?

Answer 2

So-called leader countries - those with higher GDP per capita - often have slower growth rates because inventing and implementing cutting-edge technology is slow and costly.Follower countries often can grow faster because they can leapfrog outdated technologies in favour of their modern equivalents.For instance,some nations skipped land-line phone technology altogether - huge infrastructure costs are associated with installing phone lines across a nation - in favour of cell phones.

Question 3

Use the diagram below to answer the questions.
(a)If the economy's production possibilities curve is shown by curve AB,then draw in a new curve,which indicates positive economic growth.
(b)If the economy illustrated by production possibilities curve AB is producing at point 4,what economic problem does this represent for this economy?
(c)What are some of the factors,which could cause a shift from AB to EF?

Answer 3

(a)Any production possibilities curve outside AB indicates growth (such as curve CD).See graph below.
(b)Production at point 4 indicates that the economy is not operating at its full potential.Increases in aggregate demand or reallocation of resources may be necessary to address this unemployment problem.
(c)A shifting from AB to EF indicates economic growth.This can occur as a result of supply factors that include increased quantity and quality of natural and human resources,increase in the stock of capital,and improved technology;growth in aggregate demand which motivates increases in production;and more efficient allocation of resources.

Question 4

How much faster will a nation's Real GDP double if its annual rate of growth is 3 percent rather than 1.5 percent per year?

Question 5

Suppose an economy's real GDP is $100,000 in year 1 and $110,000 in year 2.What is the growth rate of its GDP? Assume that population was 200 in year 1 and 205 in year 2.What is the growth rate in GDP per capita?

Question 6

Identify the two major ways economic growth is measured.

Question 7

Explain the demand factor in economic growth.

Question 8

Suppose an economy's real GDP is $50,000 in year 1 and $55,000 in year 2.What is the growth rate of its GDP? Assume that population was 100 in year 1 and 105 in year 2.What is the growth rate in real GDP per capita?

Question 9

Summarize the four supply factors in economic growth.

Question 10

What is the efficiency factor?

Question 11

List some of the institutional structures that economic historians believe promote and sustain modern economic growth.

Question 12

Canada's economy has realized significant economic growth in the last 50 or so years.Still,there are some items missing in our growth calculations that might impact our standard of living.List three of them and describe how their inclusion might modify our interpretation of economic growth statistics.

Question 13

Explain why even small changes in the rate of economic growth are significant.Use the "rule of 70" to demonstrate the point.

Question 14

Define modern economic growth.When did it seem to start?

Question 15

Suppose an economy's real GDP is $125 billion in year 1 and $130 billion in year 2.What is the growth rate of its GDP?

Question 16

Is growth felt evenly across society and around the world?

Question 17

Summarize the historical growth record of Canada between 1961 and 2011 in terms of real GDP growth and in terms of real GDP per capita growth.

Question 18

What is the relevance of productive and allocative efficiency to the growth process?

Question 19

Why is economic growth desirable?

Question 20

Suppose an economy's real GDP is $700 billion in year 1 and $718 billion in year 2.What is the growth rate of its GDP?

Question 21

What is meant by economies of scale and what is the importance of this concept to economic growth?

Question 22

Summarize the anti-growth view of economic growth.

Question 23

What are the characteristics of current rise in the Average Rate of Productivity Growth that distinguishes it from the economy of previous periods?

Question 24

If an economy has 9,000 workers with each working 2,000 hours per year and the average real output per worker-hour is $20,what is real GDP?

Question 25

Are economic growth and progress synonymous? How might they differ?

Question 26

Aside from increases in labour and capital inputs,what accounts for economic growth in Canada?

Question 27

If an economy has 2,000 workers with each working 3,000 hours per year and the average real output per worker-hour is $10,what is real GDP?

Question 28

What are the economic implications from the current rise in the Average Rate of Productivity Growth?

Question 29

Offer a defense of economic growth.

Question 30

Offer a skeptical perspective on the economics of the recent increase in the average rate of Productivity Growth.

Question 31

Does the recent increase in the average rate of Productivity Growth mean that the downward trends of the rate of economic growth will not occur in the future?

Question 32

What are the reasons for improved resource allocation?

Question 33

Which is more important-the quantity of inputs or the productivity of inputs-as a source of economic growth in Canada? Explain.

Question 34

Define worker-hours and labour productivity.What factors are behind labour productivity?