Describe the economic growth that influence the living standard of people.

Question

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Answer 1

Question

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.

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

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Answer 2

Question

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.

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

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.

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

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.

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Answer 6

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.

Economics Concept Introduction

Rule of 70: The rule of 70 explains how long it will take for a variable to double in size.

Answer 7

Chapter 16, Problem 1CQ

To determine

Describe the economic growth that influence the living standard of people.

Answer 8

Expert Solution & Answer

Explanation of Solution

According to the economist Robert Lucas, to achieve the growth of real income, the growth of real output is essential. Hence, without achieving the growth of real output, the household would not achieve higher income and standards of living.

Suppose the growth of the economy increases, it would lead to an increase in the production possibilities such as efficiency in technological progress, significant allocation of goods and services, and the improvement in efficient and sufficient labor and capital. Due to an increase in the production possibilities, the economy will achieve a higher per capita real GDP. A higher per capita GDP implies that the per capita income of the individual becomes high. Hence, with high income, the households improve their standard of living.

According to the rule of 70, if the economic growth is 2 percent, it will take 35 years (702) to increase the income level. If the economic growth is 4 percent, it will take 17.5 years (704) to increase the income level. Therefore, if the economic growth increases from 2 percent to 4 percent, it will take less number of years to double the income. Therefore, it makes much difference when an economy grows at 2 percent or 4 percent annually.