Summary Chapter 26 ~ economics 20th global edition

Economics Block 2 Chapter 26 Summary


LO26.1 List two ways that economic growth is measured
Economists defne and measure economic growth either:
 Increase id real GDP occurring over some tme period
 An increase in real GDP per capita occurring over some tme period

The economic growth is calculated per quarter (3 month period) or per year.
real GDP
real GDP per capita=
Population
Economic growth
 Growth as a goal  growth lessens the burden of scarcity
 Arithmetc of growth  rule id 70
o To calculate how much years, it requires to double the real GDP
70
number of years=
annual percentage rate of growth
Growth in the United states:
 1950-2012  real GDP increased more than 6x (3.1% per year)
 Real GDP per capita increased more than 3x (±2% per year)
 Must qualify these raw numbers in several ways
o Improved products and services
o Added leisure
o Other impacts



LO26.2 Defne ‘modern economic growth’ and explain the insttutonal structures needed oor
an economy to experience it
Modern economic growth Characterized by sustained and ongoing increases in the living
standards that can cause dramatc increases in the standard of living
within less than a single human lifetme


Modern economic growth has efects on:

 Cultural  wealth and living standards increases  tme for leisure
 Socially  social changes
 Politcally  democracy
 Human lifespan doubled

Catching up is possible:

 Leader countries  real GDP growth with 2 or 3 % invent technology
 Follower countries  grow faster because can adapt existng technology