Unit 2: Introduction to Macroeconomics

Lesson 8a: Economic Growth

Outcomes - What you should learn

TOPICS

- Definitions of EG
- EG in the US
- Modern EG
- Determinants of EG
- Causes of Productivity Growth

OUTCOMES

Give three definitions of economic growth and illustrate them on the 5Es, PPC, AS/AD, and LRAS models.

Use the 5Es, PPC, AS/AD, and LRAS models to differenciate between "achieving our potential" and "increasing our potential".

Explain why growth is a desirable goal.

Define “modern economic growth” , "great divergence", "leading country", and "follower country".

Identify two main sources of growth (more resources, more productivity) and apply them to the growth history of the United States.

Explain and apply the "rule of 70."

Identify and explain the supply factors (INCREASING the potential)

Identify and explain the demand, and efficiency factors (ACHIEVING the potential)

Differentiate between ACHIEVING the potential and INCREASING the potential using the PPC. AD/AD, and long-run AS models

According to the authors, why is the real GDP per capita of the United States in 2007 so much higher than that of other rich countries?

Differentiate between production, productive efficiency, and productivity

If the quantity of labor increases, what happens to productivity? ANSWER: Nothing. The quantity of labor will affect production, but the quality of labor affects productivity

What are the determinants of productivity growth?

Identify and explain the arguments for and against economic growth.

 

HOME

Lesson 8a