Chap 15 Questions Flashcards
What kind of goods does economic growth allow society to consume?
higher quality and more goods and services
If an economy moves from a point inside the productions possibilities curve to a point on the curve, we can say that there has been?
An increase in capacity utilization.
What is one way to illustrate long-run expanded capacity?
Shifting production possibilities curve out and away from the origin
How is underutilization of available capacity illustrated with a production possibilities curve?
By some point inside the production possibilities curve
In the short run, increases in capacity utilization may often occur when the economy does what?
moves from a point inside the production possibilities curve to a point on the curve
What does economic growth imply?
A rightward shift of the long-run aggregate supply curve
What can be used by Economists to define and/or measure economic growth?
an increase in real GDP occurring over some time period, an expansion of production possibilities occurring over some time period & an increase in potential GDP over some time period
Economic growth is what kind of process?
A cumulative, continuing and exponential process
What is the growth of GDP versus the GDP per capita useful for?
The growth of GDP is a useful measure of the expansion of the economy while the GDP per capita is a useful measure for living standards
When is growth in GDP per capita obtained?
when the growth of output exceeds population growth
What two ways can society increase its real output and income?
By increasing the employment rate and raising the productivity of labor
What happens when productivity increases?
So do living standards
What are the sources of productivity growth?
Higher skills, more capital, improved management and technological advancement
