Introduction to Macroeconomics (Chapter 5: Long Run Economic Growth)

How can we make labor more productive?

1. Human capital 2. Physical capital 3. Technology

What did France put in place to prevent food waste?

2016 laws banned grocery stores from throwing away edible food. Stores can be fined $4500 for each infraction.

What percent of the population lives in a country that has a lower standard of living than the U.S. in 1900?

25%

Cost of rise in Chinese real GDP?

Air pollution in many Chinese cities

Rule of 70

Doubling time (in years) = 70/(percentage growth rate).

Sources of Long-Run Growth

Labor productivity (output/hours worked)= (Y/L)

GDP per worker equation

T x (K/L) x (H/L)

GDP ignores the following:

Volunteerism, Child and elder care provided by family, income disparities, well-being, and work satisfaction.

Yf=Yi*e^tr

Yf is size of pop after time. Yi is initial size. t is # of years. r is growth rate in decimal form.

Long-run growth

occurs when an economy finds new resources or finds ways to use existing resources better

Short-run growth

occurs when an economy makes use of existing but underutilized resources *common during recovery from recession*

aggregate production function

the process whereby an economy as a whole turns economic inputs such as human capital, physical capital, and technology into output measured as GDP per capita