Ch 19

Question 1

Real GDP per person

Answer 1

is a measure of the goods available to a typical person

Question 2

One clue to growing prosperity in the 20th century

Answer 2

GDP per person in 2010 was 12 times greater than it was in 1870

Question 3

Comparisons across long periods are complicated by lack of data

Answer 3

The variety, quantity, and quality of goods increased enormously from the 19th to 20th century

Question 4

Compound interest

Answer 4

pays interest on the original deposit and all previously accumulated interest
Interest paid in year 1 earns interest in year 2
$10 deposited at 4% interest in 1815 is $25,507.50 in 2015
$10 x (1.04)200 = $25,507.50

Question 5

Years to Double

Answer 5

Years to double = 72 / interest rate
If the interest rate equals 2% then it takes 36 years for your money to double
If GDP grows at 3% then it takes 24 years for GDP to double

Question 6

Real GDP per Capita

Answer 6

Y = real GDP
N = number of people employed
POP = population

y/pop = y/n * n/pop

Question 7

GDP per capita

Answer 7

the product of output per worker and the share of the total population that is working

Question 8

Consumption per person depends on

Answer 8

How much each worker produces and

The share of people working