Macro Graded Assignmet #5

China was the largest economy for centuries because everyone had the same type of economylong dashsubsistencelong dashand so the country with the most people would be economically biggest. Then the Industrial Revolution sent the West on a more prosperous path. Now the world is returning to a common​ economy, this time​ technology- and​ information-based, so once again population triumphs. Why was China the​ world's largest economy until​ 1890? Why did the United States surpass China in 1890 to become the​ world's largest​ economy? China was the​ world's largest economy until 1890 because​ ______.

people in all countries had approximately the same subsistence level of income and China had the largest population

Explain the influences on the pace of labor productivity growth. Once the preconditions for growth are in​ place, the influences on the pace of labour productivity growth are​ _______.

physical capital​ growth, human capital​ growth, and technological advances

What determines the demand for​ labor, the supply of​ labor, and labor market​ equilibrium? The demand for labor is the relationship between the quantity of labor demanded and the​ ______. The supply of labor is the relationship between the quantity of labor supplied and the​ ______.

real wage​ rate; real wage rate

What is the relationship between the growth rate of real GDP and the growth rate of real GDP per​ person? The growth rate of real GDP per person​ _______.

tells us about changes in the standard of living and the growth rate of real GDP tells us how rapidly the total economy is expanding

In​ 1890, the United States surpassed China to become the​ world's largest economy because​ ______.

the benefits of the Industrial Revolution were greater in the United States than in China

What is economic growth and how do we calculate its​ rate? Economic growth is​ _______.

the expansion of production possibilities

What are the two broad sources of potential GDP​ growth? The two broad sources of potential GDP growth are growth of​ ______ and growth of​ ______.

the supply of​ labor; labor productivity

What determines potential​ GDP? Potential GDP is determined by​ ______.

the​ full-employment quantity of labor

Growth rates are calculated in a similar manner for all variables. Real GDP growth rate​ = [(Real GDP in​ ______ yearminusReal GDP in​ ______ ​year) divided by Real GDP in​ ______ year ​] times 100.

​current; previous; previous

Choose the correct statement

Labor hours are not all equally productive.

China's real GDP per person was​ 11,480 yuan in 2011 and​ 12,515 yuan in 2012.​ India's real GDP per person was​ 45,045 rupees in 2011 and​ 47,995 rupees in 2012. The population of China is growing at 1 percent a year and the population of India is growing at 1.4 percent a year. Calculate the growth rate of real GDP in each country.

10% 7.9%

What has been the average growth rate of U.S. real GDP per person over the past 100​ years? In which periods was growth most rapid and in which periods was it​ slowest? Over the past 100​ years, the average growth rate of U.S. real GDP per person is 2 percent. Over the past 100​ years, growth was most rapid during the​ ______ and slowest during the​ ______.

2 1960s; Great Depressio

In 2018​ Brazil's real GDP is growing at 1.7 percent a year and its population is growing at 0.7 percent a year. If these growth rates​ continue, in what year will​ Brazil's real GDP per person be twice what it is in​ 2018? If these growth rates​ continue, Brazil's real GDP per person will be twice what it is in 2018 in​ _______.

2088

If real GDP per person doubles in 20​ years, then the annual growth rate of real GDP per person is​ ______ percent a year.

3.5

Choose the correct statement.

Each additional hour of labor increases real GDP by successively smaller amounts.

Choose the correct statement

If there is a shortage of​ labor, the real wage rate rises to eliminate the shortage.

Choose the correct statement

Most technologies are embodied in physical capital.

Argentina​'s real GDP was 702 billion pesos in 2014 and 721 billion pesos in 2015. Argentina​'s population growth rate in 2015 was 1.08 percent. Calculate a. The growth rate of real GDP. b. The growth rate of real GDP per person. c. The approximate number of years it takes for real GDP per person in Argentina to double if the 2015 growth rate of real GDP and the population growth rate are maintained.

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Draw a labor supply curve and a labor demand curve. Label them LS0 and LD0. Draw a point at the equilibrium quantity of labor and the equilibrium real wage rate. Label it 1. Draw and label a curve that shows the effect of an increase in population. Draw a point at the new equilibrium quantity of labor and the equilibrium real wage rate. Label it 2. An increase in the population​ ______ potential GDP and​ ______ potential GDP per hour of labor.

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Explain the processes that will bring the growth of real GDP per person to a stop according to a. Classical growth theory. b. Neoclassical growth theory. c. New growth theory. According to classical growth​ theory, the growth of real GDP per person stops when​ _______.

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If a large increase in investment increases labor​ productivity, explain what happens to a. Potential GDP. b. Employment. c. The real wage rate. When labor productivity​ increases, there is​ _____ the production function and​ _____ in potential GDP.

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Suppose that the United States cracks down on illegal immigrants and returns millions of workers to their home countries. Draw a labor supply curve and a labor demand curve for Mexico. Label the curves LS0 and LD0. Draw a point at the equilibrium quantity of labor and the equilibrium real wage rate. Label it 1. Now suppose the United States returns millions of illegal immigrant workers to their home countries. Draw a curve that shows the effect of this return of workers in Mexico. Label it. Draw a point at the new equilibrium quantity of labor and the equilibrium real wage rate. Label it 2. The effect of the United States returning millions of workers to their home countries is​ _____ Mexico's production function and​ _____ in potential GDP.

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The first table describes an​ economy's labor market in 2018 and the second table describes its production function in 2018. What are the equilibrium real wage​ rate, the quantity of labor employed in​ 2018, labor​ productivity, and potential GDP in​ 2018?

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The graph shows the production function of an economy. ​Currently, the​ full-employment quantity of labor is 200 billion hours a year. Population increases and the new​ full-employment quantity of labor is 300 billion hours. Draw an arrow that shows the effect of this increase in population. Draw a point at the new value of​ full-employment and potential GDP. Label it B.

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The left graph shows an​ economy's labor market. Draw a point that shows equilibrium in the labor market. The right graph shows the​ economy's production function. Draw a point on the production function that shows potential GDP in this economy.

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The table provides some data on real GDP and the population of Europa in 2013 and 2014. What was the growth rate of real GDP in Europa in 2014​? What was the growth rate of real GDP per person in Europa in 2014​?

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Choose the correct statement about an increase in the population.

Potential GDP per hour of labor decreases.

Choose the correct statement about growth in labor productivity.

Potential GDP per hour of labor increases.

Describe the gaps between real GDP per person in the United States and in other countries. For which countries is the gap​ narrowing? For which is it​ widening? For which is it the​ same? Since​ 1980, the gap between the United States and​ _______.

Russia and between the United States and Nigeria​ narrowed, the gap between the United States and Mexico​ widened, and the gap between the United States and the Europe Big 4 remained relatively constant

Choose the statements concerning neoclassical growth theory that are true. 1. As incomes increase both the birth rate and the death rate decrease. nothing 2. Economic growth will stop if technology stops advancing. nothing 3. Technological change results from the choices people make in the pursuit of profit. nothing 4. Neoclassical growth theory was developed in the late 19th century. nothing

Statements 1 and 2 are correct

Choose the correct statement

The annual growth rate of real GDP fluctuates widely over the business cycle.

Labor market equilibrium occurs​ _______.

at the real wage rate at which the quantity of labor demanded equals the quantity of labor supplied

Economic growth is measured by

changes in real GDP.

What are the effects of an increase in the population on potential​ GDP, the quantity of​ labor, the real wage​ rate, and potential GDP per hour of​ labor? An increase in the population​ ______ the real wage rate and​ ______ the equilibrium quantity of labor.

decrease; icreases

Complete the sentence. In new growth theory​ ______.

discoveries result from choices

We are interested in long-term growth primarily because it brings

higher standards of living

The quantity of labor demanded is the number of labor hours​ _______ during a given period. The quantity of labor supplied is the number of labor hours​ _______ during a given period.

hired by all the firms in the​ economy; that all the households in the economy plan to work

What is the aggregate production​ function? The aggregate production function is the relationship that tells us​ ______, when all other influences on production remain the same.

how real GDP changes as the quantity of labor changes

What is the fundamental source of labor productivity​ growth? The fundamental source of labor productivity growth is​ ______.

human capital

Potential GDP​ ______ and potential GDP per hour of labor​ ______.

increases; decreases

What is the key proposition of new growth theory that makes economic growth​ persist? The key proposition of new growth theory that makes growth persist is that​ ______ is not subject to diminishing returns.

knowledge capital

Complete the sentence. Real GDP per person grows when​ ______.

real GDP grows at a faster rate than the population grows

Complete the sentence. According to classical growth​ theory, when real GDP per person​ ______, the population grows.

rises above the subsistence level

Complete the sentence. An increase in labor productivity​ ______.

shifts the demand for labor curve rightward and the production function upward

What, according to neoclassical growth​ theory, is the fundamental cause of economic​ growth? According to neoclassical growth​ theory, the fundamental cause of economic growth is​ ______.

technological​ change, which induces saving and investment that make capital per hour of labor grow

Use the Rule of 70 to calculate the growth rate that leads to a doubling of real GDP per person in 20 years. The Rule of 70 states that the number of years it takes for the level of any variable to​ ______ is approximately​ ______.

​double; 70 divided by the annual percentage growth rate of the variable

What are the effects of an increase in labor productivity on potential​ GDP, the quantity of​ labor, the real wage​ rate, and potential GDP per hour of​ labor? An increase in labor productivity​ _______ potential GDP and​ ______ potential GDP per hour of labor.

​increases; increases

An increase in labor productivity​ ______ the real wage rate and​ ______ the equilibrium quantity of labor.

​increases; increases;