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23 Cards in this Set
- Front
- Back
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How Do We Define Economic Growth?
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Economic growth can be shown graphically by shifting the production possibilities curve outward.
Economic growth reflects the fact that more of all goods can be produced within the economy. |
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Economic Growth
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Increase in per capita real GDP measured by its rate of change per year
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The Rule of 70
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A rule stating that the appropriate number of years required for per capital real GDP to double is equal to 70 divided by the average rate of economic growth
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Economic growth =
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Rate of growth of capital + Rate of growth of labor +
Rate of growth in the productivity of capital and of labor |
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Labor Productivity
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Total real domestic output (real GDP) divided by the number of workers (output per worker)
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Saving: A Fundamental Determinant of Economic Growth
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To have more consumption in the future, you must consume less today and save the difference between your consumption and your income.
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Population and immigration as they affect economic growth
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MIT economist Michael Kremer believes population growth drives technological progress.
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How can well-defined property rights stimulate economic growth?
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The more certain property rights are, the more capital accumulation there will be.
The more certain are property rights, the more entrepreneurship there will be. |
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Development Economics
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The study of factors that contribute to the economic growth of a country
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The goal of development economists is to ...
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help the 4 billion people with low living standards to join the 2 billion people with moderately high ones.
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Putting world poverty into perspective
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At least one-half of the world’s population lives at subsistence level.
20% of the world lives on less than $1.50 per day. The U.S. poverty level exceeds the average income of one-half the world. |
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Relationship between population growth and economic development
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There are nearly 7 billion people on earth.
By 2050, according to the U.N., world population will be close to 9.1 billion. Growth will occur mainly in developing nations. |
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Growth will occur mainly in developing nations.
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Growth leads to smaller families.
The more economic development occurs, the slower the population growth rate. Birth rates decline with modernization. Reduced infant mortality People do not rely on children to take care of them in old age |
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The stages of development
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Agricultural stage
Manufacturing stage Services stage |
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Keys to economic development
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Establishing a system of property rights
Developing an educated population Letting “creative destruction” run its course Limiting protectionism |
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Governments of more than 20 countries are offering compensation for women to have children
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$1,500 lump sum payments to new mothers in Italy
$4,000 in Australia $9,200 in Russia Explicit wage compensation |
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Other alternatives to boosting population growth:
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Subsidies aimed at increasing human capital investments (i.e. education, self-teaching to yield immediate productivity payoffs)
Boost national labor forces through immigration |
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Why productivity increases are crucial for maintaining economic growth
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For a nation with a stable population and steady capital growth, productivity growth is the main factor in economic expansion.
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The key determinants of economic growth
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Increases in the labor force, the growth of capital, and the growth of productivity
Higher saving rates contribute to greater investment and increased capital accumulation and growth |
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New growth theory
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Emphasizes how rewards to innovation contribute to higher growth rates
Ideas and knowledge are crucial elements |
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Economic growth
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The rate of economic growth is the annual rate of change in per capita GDP.
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Why economic growth rates are important
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Over long intervals, relatively small differences in the economic growth rate can produce large disparities in per capita incomes.
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Bronchosopy
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Lighted camera inserted through the MOUTH into the main stem BRONCHUS
-can see tumors, obtain specimens, suction out lower airways |
