ECON MACRO
5th Edition
ISBN: 9781337000529
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 8, Problem 2.4P
To determine
Output per work hour produced by each nation 20 years later and the output per work hour produced by each nation 100 years later and the effect of small differences in productivity growth rates are to be determined.
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Q-1. How would you describe the relationship between labor productivity and labor earnings over the last several decades?
A. Labor productivity declined after 1990, but labor compensation continued to grow.
B. Labor compensation and productivity grew very similarly until the mid-1970s, and after that productivity grew faster than labor compensation.
C. Labor compensation and productivity grew very similarly until the mid-1970s, and after that labor compensation grew more rapidly than productivity did.
D. Labor productivity and labor compensation grew at the same rate, as they always must according to our model.
Q-2. Which of the following will NOT result in a shift in the labor demand curve?
A. New technology that raises the marginal physical product of labor.
B. An increase in the wage.
C. A decrease in the price of the good produced.
D. All of these will shift the labor demand curve.
PLEASE SOLVE BOTH QUETIONS
1. Economic growth around the world
The following table reports real income per person for several different economies in the years 1960 and 2010. It also gives each economy's average annual growth rate during this period. For example, real income per person in the Central African Republic was $1,010 in 1960, and it actually declined to $628 by 2010. The Central African Republic's average annual growth rate during this period was -0.95%, and it was the poorest economy in the table in the year 2010.
The real income-per-person figures are denominated in U.S. dollars with a base year of 2005. The following exercises will help you to understand the different growth experiences of these economies.
Economics
2. Assume that the total hours of work in Mexico are 200 in the year 2019 and the productivity is $8 per hour worked. Determine the real GDP of Mexico in 2019. If the total hours worked is 210 in the year 2020 and the productivity is $10 per hour worked in the year 2020. What is the economic growth rate of the GDP of Mexico in 2020?
Chapter 8 Solutions
ECON MACRO
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Similar questions
- Labor Productivity and Economic Growth outlined the logic of how increased productivity is associated with increased wages. Detail a situation where this is not the case and explain why it is not.arrow_forwardHow do gains in labor productivity lead to gains in GDP per capita?arrow_forwardquestion 1 Suppose that work hours in New Zombie are 200 in year 1 and productivity is $8 per hour worked. What is New Zombie’s real GDP? If work hours increase to 210 in year 2 and productivity rises to $10 per hour, what is New Zombie’s rate of economic growth? Explain why sustained long-term economic growth comes from increases in labor productivity. Why do you think the trend rate of U.S. productivity growth has increased since the earlier 1973–1995 period?arrow_forward
- Question 17 When production in an economy grows more quickly than the population in that economy, which of the following must be occurring? Living standards are falling The economy is a successful one. Real GDP is falling Incomes are growing at a slower rate than the populationarrow_forwardPrepare a chart that compares India, Spain, and South Africa based on the data you find. Describe the key differences between the countries. Rank these as high-, medium-, and low-income countries, explain what is surprising or expected about this data.arrow_forwardD7) Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth, and why?arrow_forward
- 9 why is it necessary to adjust changes in nominal gross domestic product for changes in prices and changes in population, Computing real per capita GDP before using it as a measure of economic growtharrow_forwardEconomy 1. Pamela worked as an auditor earning $60,000 per annum. She decided to open her own consultancy business. For her business, she rents an office where she pays $2,000 per annum. Further, her utility expenses are $300 per annum and she hired a part-time secretary to whom she pays $25,000 per annum. To start her business, she borrowed $40,000 from her savings, where she was earning an interest of $500 per annum. In her first year, her business earned a revenue of $300,000. Based on this information, calculate the following: a. Total implicit costs per annum b.Total explicit costs per annum c.Total accounting costs and accounting profit for that year d.Total economic costs and economic profit for that yeararrow_forwardSubject: Business Economics 8. In 1990 real GDP per capita in the US was $40000. In 2004 real GDP per capita was $80000.What was the average annual growth rate of real GDP per capita in the US during this time?arrow_forward
- Question 4 Explain the determinants of productivity. (Word count: 250 words max.) Many countries import considerable amounts of goods and services from other countries. Yet economists argue that a nation can enjoy a high standard of living only if it can produce a large quantity of goods and services itself. Can you reconcile these two facts? (Word count: 250 words max.)arrow_forwardHow much should a nation be concerned if its rate of economic growth is just 2 slower than other nations?arrow_forwardOver the past 50 years, many countries have experienced an annual growth rate in real GDP per capita greater than that of the United States. Some examples are China, Japan, South Korea, and Taiwan. Does that mean the United States is regressing relative to other countries? Does that mean these countries will eventually overtake the United States in terms of the growth rate of real GDP per capita? Explain.arrow_forward
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