Answered: What is meant by economies of scale and…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Production And Growth

Section: Chapter Questions

Problem 9PA

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c. What is meant by economies of scale and what is the importance of this concept to economic growth?
d. Suppose that society decided to reduce consumption and increase investment.
i. How would this change affect economic growth?
ii. What groups in society would benefit from this change?
iii. What groups might be hurt?

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

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