Econ 211 Exam 2 – UNL Rated A+
2 ways economic growth is measured ️Nominal and real GDP
Nominal GDP ️often appear higher than real GDP, not adjusted for inflation (GDP17=P17 x Q17)
Real GDP ️adjusted for inflation (GDP17=P09 X Q17)
GDP is reported.. ️Quarterly (Advanced, Premlim a...
Econ 211 Exam 2 – UNL Rated A+
2 ways economic growth is measured ✔️Nominal and real GDP
Nominal GDP ✔️often appear higher than real GDP, not adjusted for inflation (GDP17=P17 x Q17)
Real GDP ✔️adjusted for inflation (GDP17=P09 X Q17)
GDP is reported.. ✔️Quarterly (Advanced, Premlim and final)
Economic growth is measured as ✔️a % change in real GDP on an annual basis (real GDP2 - real GDP 1 /
real GDP 1) x 100
another way to measure economic growth ✔️change in real GDP per capita ( Per capita GDP2 - per
capita GDP1 / pre capita GDP1) X 100
Importance of economic growth ✔️- lessens the burden of scarcity
- expand production possibilities
- more resources & incomes
- get more goods & services to meet unlimited wants
Rule of 70 ✔️- how many years it will take for an economy to double
- divide average annual % rate of economic growth into 70 (70/1.0% = 70 years to double)
Modern economic growth ✔️After late 1770's, sustained and continual economic growth
History of modern economic growth ✔️before the late 1770's nations experienced limited/sporadic
economic growth which lead to living standards not changing much from century to century
- living standards improved
-changes occur w/in less than a human lifetime
, Economic growth started when ✔️- industrial revolution in 1776
- James Watt invented the steam engine which lead to new factories, mass production of goods,
different forms of transportation, later was replaced by electric power and oil
How can follower nations catch up to leader nations? ✔️- Leader nations invent technology while
follower nations adopt technology
- higher long-term growth rates for follower nations
Institutional structures that promote growth (main 6) ✔️- strong property rights
- patents & copyrights
- efficient financial institutions
- literacy & education
- free trade
- competitive market system
other structures that promote growth (2) ✔️- stable politcal system
- positive attitude towards work
What factors contribute to economic growth over time? ✔️- supply factors
- efficiency factors
- demand factors
Supply factors for economic growth ✔️- Natural resources
- human resources
- capital resources
- technology
supply factors can ✔️expand the economy's potential, takes effect in a long time period
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