UNIT 6
Economic Growth and Productivity (5–10%) Textbook Chapter 25

A. Investment in human capital
B. Investment in physical capital
C. Research and development, and technological progress
D. Growth policy




















AP ECONOMICS CHAPTER 25; Long-Run (LR) ECONOMIC GROWTH.
1) The key stat used to track economic growth is. ………………………………………………(Pg187)
2) We use this stat because it separates changes in the quantity of goods and service from the effects of a rising ……………………………. ……………………………….. (pg 187).
3) The income of a typical family normally grows in proportion to per capita income T/F. (pg188)
4) Many people in the world have yet to achieve the standard of living the USA had a century ago T/F.
5) What is the Rule of 70 and why do we use it. ………………………………………………………………………(Pg189).
6) LR economic growth depends almost entirely on one ingredient…………………………………………….(pg191)
7) Sustained economic growth occurs only when …………………………………………………………………..(pg191)
8)Productivity refers to....................................................................................................................................................(pg191)
9) Any large increase in real GDP per capita must be a result of increased output per……………(pg191)
10) There are three main reasons why the average USA worker today producers far more than his or her counterpart a century ago a)………………………………….b)………………………………..c)………………………......(pg191)
11) Define and give an example for
a) Physical Capital…………………………………………………………………………………………………………………………….
b) Human Capital………………………………………………………………………………………………………………………………
c) Technology……………………………………………………………………………………………………………………………………
12) Write out and explain the Aggregate Production Function…………………………………………………………….....
…………………………………………………………………………………………………………………………………………………………….
……………………………………………………………………………………………………………………………………………………………
13) To analyze economic growth, economists discovered a crucial fact about the estimated aggregate production function; it exhibits D…………. R………………….. to P………………… C………………… That is.
……………………………………………………………………………………………………………………………………………….(pg 193).
14) Growth accounting estimates………………………………………………………………………………………………(pg195)
15) Using figure8-5 explain how technological progress shifts the productivity curve……………………………
…………………………………………………………………………………………………………………………………………………………….
…………………………………………………………………………………………………………………………………………………………….
16) Total Factor Productivity is the ……………………………………………………………………………………………(pg196)
17) Why is the increase in total factor productivity central to a county’s economic growth?………………
………………………………………………………………………………………………………………………………………………..(pg176)
18) Kuwait’s GDP comes mainly from………………………..…..…… where’s as South Korea’s GDP mainly comes from……………………………………………………….. (pg 196)
19) Natural resources are a much less important determinant of productivity than human or physical capital for the great majority of countries T/F. (pg196)
20) The famous 1798 book “An Essay on the Principle of Population” by Thomas Malthus talked about
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………(pg196)
21) To increase the physical capital available to workers, an economy must engage in …………………………
There is two ways to do this……………………………………………….&…………………………………………………..(pg198)
22) Why is well-functioning banking system important…………………………………………………………………………
………………………………………………………………………………………………………………………………………………..(pg199)
23) Explain how a country can benefit from foreign investment………………………………………………………………
…………………………………………………………………………………………………………………………………………………(pg199)
24) An economy’s physical capital is created mainly through I…………………… s…………………… by individuals and private companies. Much of an economy’s human capital is a result of g…………. s…………… on education. Individuals mainly pay for tertiary education. The quality of education a country provides for it’s citizens has a large impact on its E……………………… G……………………. R……………… (pg 200)
25) The term infrastructure refers to …………………………………………………………………………………………………… and is important to economics because………………………………………………………………………………………………..
………………………………………………………………………………………………………………………………………..(pg200)
26) The advance of technology is a key force behind economic growth T/F (pg200)
27) Explain R&D ………………………………………...........................................................................................................(pg200)
28) Political stability and protection of property rights are crucial ingredients in l…….. R……………
E……………….. G…………………….. . Why is this so…………………………………………………………………….. (pg201)
29) Explain the “Latin American Disappointment”............................................................................................................
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..
30) Explain “Africa’s trouble”………………………………………………………………………………………………………………….
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………………………………………
31) Explain “ the Asian Miracle”……………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..
32) Read “economics in action” pg205-206 and write some points about this make sure you mention the convergence hypothesis.
…………………………………………………………………………………………………………………………………………………………….
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