Macroecon chapter 10

Question 1

Ypc formula

Answer 1

Y/population

Question 2

%ΔYpc formula

Answer 2

%ΔY - %ΔPopulation

Question 3

Average annual growth rate of Y formula

Answer 3

%ΔY = [((Ym/Y0)^(1/m)) - 1] x 100

Question 4

Benefits of econ growth

Answer 4

Better living standard (relation to GDP per capita)

Question 5

%ΔGDPpc formula

Answer 5

%ΔGDP - %ΔPopulation

Question 6

Gini index

Answer 6

Measure income inequality and poverty ( 1$ per day )

Question 7

Limitation and cost of econ growth

Answer 7

Sustainability

Question 8

Saving is equal to…

Answer 8

Investment

Question 9

Private saving formula

Answer 9

Y* - T - C

Question 10

Public saving formula

Answer 10

T - G

Question 11

National saving formula

Answer 11

Yep - C - G

Question 12

Total saving formula

Answer 12

Private saving + Public saving

Question 13

Real interest rate influence on investment curve

Answer 13

Negative

Question 14

Sales influence on investing curve

Answer 14

Positive

Question 15

Future influence on investment curve

Answer 15

Positive

Question 16

ΔSale on investment curve

Answer 16

// shift left or right

Question 17

Real interest rate influence on NS curve

Answer 17

Positive

Question 18

Potential GDP influence on NS curve

Answer 18

Positive

Question 19

Government purchases influence on NS curve

Answer 19

Negative

Question 20

Consumer spending influence on NS curve

Answer 20

Negative

Question 21

If ΔYp > 0

Answer 21

NS curve shift // right and real interest rate ↘️

Question 22

If ΔC > 0

Answer 22

NS curve shift // left and interest rate ↗️

Question 23

If ΔG > 0

Answer 23

NS curve shift // left and real interest rate ↗️

Question 24

Neo Classical Model

Answer 24

Y = f( tech, L, K, H)

Question 25

Key assumptions of classical model (2)

Answer 25

• Diminishing marginal returns of capital of L and K
• Constant return to scale

Question 26

If α+β = 1

Answer 26

Yz = λY1 -> constant return to scale

Question 27

If α+β > 1

Answer 27

Increasing return to scale

Question 28

If α+β < 1

Answer 28

Decreasing return to scale

Question 29

Why is tech necessary to jump to higher level of GDP per capita growth

Answer 29

Increase in material living standard

Question 30

Source of econ growth (4)

Answer 30

• Labour force
• Human capital
• Physical capital
• Technological improvement

Question 31

Neoclassical growth model is a technological…

Answer 31

Exogenous

Question 32

Other growth theory consider techno change as…

Answer 32

Endogenous

Question 33

4 reasons for endogenous tech change

Answer 33

• Learning by Doing
• Knowledge Transfer
• Market Structure
• Shocks and Innovation

Question 34

Neoclass: increasing marginal return of …

Answer 34

L and K

Question 35

Limits of econ growth (3)

Answer 35

• Natural resources are limited
• Climate change
• Environment degredation