Macro Homework 2
Real GDP per capita in the United States grew from about $6,000 in 1900 to about $ 49, 571 in 2007, which represents an annual growth rate of 1.99 percent. If the United States continues to grow at this rate, it will take ______ years for real GDP per capita to double.
35.17 RULE OF 70 --------------- AGR/70 Time is takes real GDP per capita to double.
The movement from point B to point C represents
technological change
The movement from point A to point C represents
technological change and more capital per hour worked
Since each country's real GDP is measured in a different currency, before one can compare the real GDPs of different countries, it is necessary to use
the purchasing power parities (PPPs) as a currency converter.
The agency that identifies a recession is the
NBER - National Bureau of Economic Research
Consider the following data for a closed economy: Y = $14 trillion C = $9 trillion I = $1 trillion TR = $2 trillion T = $3 trillion
Private Savings= Y+TR-T-C Public Savings= T-G-TR Government Purchases = G = Y-C-I Gov. Budget Balance = T-G-TR
Average Annual Growth Rate
Sum of Growth Rates / Number of Years
When is the government budget in deficit?
T < ( G + TR )
When is the government budget in surplus?
T > ( G + TR )
If the government changes its tax policy and taxes only real interest payments and not nominal interest payments
both saving and investment increase.
The shift from S1 to S2 represents a ____________________ in the supply of loanable funds.
decrease
If the government changes its tax policy and taxes only real interest payments and not nominal interest payments, the equilibrium real interest rate will ___________ and the equilibrium quantity of loanable funds will _____________.
decrease, increase
With the shift in supply, the equilibrium quantity of loanable funds ____________.
decreases
With the change in the equilibrium quantity of loanable funds, the quantity of saving ________________ and the quantity of investment ____________.
decreases, decreases
The movement from point A to point B represents
more capital per hour worked
