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What are spillover effects and how do they affect growth? (LO27-4)
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- A mathematical approximation called t he rule of 70 tells us that the number of years that it will take something that is growing to double in size is approximately equal to the number 70 divided by its percentage rate of growth. Thus, if Mexico’s real GDP per person is growing at 7 percent per year, it will take about 10 years (= 70 / 7) to double. Apply the rule of 70 to solve the following problem. Real GDP per person in Mexico in 2005 was about $11,000 per person, while it was about $44,000 per person in the United States. If real GDP per person in Mexico grows at the rate of 5 percent per year, about how long will it take Mexico’s real GDP per person to reach the level that the United States was at in 2005? (Hint: How many times would Mexico’s 2005 real GDP per person have to double to reach the United States’ 2005 real GDP per person?)Assume a DVC has a real per capita output of $5,000 as compared to $20,000 for an IAC. If both nations realize a 5 percent growth of their real per capita outputs, after one year the absolute real per capita output gap will increase by $750. increase by $15,750. decrease by $5,000. remain unchanged at $15,000.If a country experiences real economic growth of 12% per year, it can go from being one of the poorest to one of the richest in Question 47 options: one generation. In the last couple of decades China’s growth rate has been higher than 12%. one generation. However, in the last couple of decades not even China’s growth rate has been this high. three generations. In the last 75 years China’s growth rate has been higher than 12%. three generations. However, in the last couple of decades not even China’s growth rate has been 12%.
- Richland’s real GDP per person is $10,000, and Poorland’s real GDP per person is $5000. However, Richland’s real GDP is growing at 1% per year and Poorland’s is growing at 3 per cent per year. Compare real GDP per person in the two countries after 10 years and after 0 years. Approximately how many years will it take Poorland to catch up with Richland?Which of the following is a true statement? Multiple Choice Economists who support economic growth say that it is the most practical route to the higher standards of living that the vast majority of people desire. Most economists believe that the recent rise in the average rate of productivity growth implies an end to the business cycle. Most economists believe that increases in real GDP actually produce decreases in overall economic well-being because of spillover costs. Mainstream economists disagree as to whether the rate of productivity growth was higher between 1995 and 2012 or between 1973 and 1995.In his 2020 state of Nation address (SoNA) president of South Africa humbly noted that... '' Even if we (the government) were to Marshall every single resource at our disposal, and engage on a huge expenditure of public funds, we would not alone be able to guarantee employment to the millions of people who are out of work ''. and that '' Without growth there will be no jobs, and without jobs there will be no meaningful improvement in the lives of our people ".
- Graphically explain the impact of the covid 19 pandemic on China's economic growthRelative to productivity growth in the United States, which of the following countries experienced the largest decline in productivity growth from 1990 to 2019? Canada Japan Germany the United KingdomA mathematical approximation called the rule of 70 tells us how long it will take for something to double in size if it grows at a constant rate. The doubling time is approximately equal to the number 70 divided by the percentage rate of growth. Thus, if Panama’s real GDP per person is growing at 7 percent per year, it will take about 10 years (= 70/7) to double. Apply the rule of 70 to solve the following problem: Suppose that real GDP per person in Panama in 2017 was about $12,000 per person, while it was about $48,000 per person in the United States. If real GDP per person in Panama grows at the rate of 5 percent per year, about how long will it take Panama’s real GDP per person to reach the level that the United States was at in 2017? (Hint: How many times would Panama’s 2017 real GDP per person have to double to reach the United States’ 2017 real GDP per person?) __________ years
- Exponential growth implies that: Relatively small differences in growth rates translate into substantial differences in the level of a quantity after many years of growth. Growth rates can only be positive. Growth rates will alternate between positive and negative values in every consecutive period. Relatively large differences in growth rates will translate into small differences in the level of a quantity after many years of growthBarriers to achieve sustainable economic growth: discuss the potential barriers to achieve the objective of sustainable economic growth.The great 18th century economist Adam Smith wrote “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.” Explain how each of the three conditions Smith describes might promote long run economic growth.