Chapter 18 - Economic Growth

Question 1

At what point in the PPC curve does economic growth doesn’t result in inflation?

Answer 1

Inside the curve

Question 2

How to increase quality of goods and capital?

Answer 2

Education and training

Question 3

Does healthcare increase productivity?

Answer 3

Yes. German for example. Good healthcare, good facilities, good food. Go as efficient as possible withim short time.

Question 4

What is real GDP?

Answer 4

Total output measured in constant price. Inflation adjusted

Question 5

What is nominal GDP?

Answer 5

Total output measured in current price

Question 6

In term of value which one is higher? Nominal or real?

Answer 6

Nominal GDP

Question 7

Why nominal GDP is not a good indicator for economic growth?

Answer 7

Nominal GDP immcrease due to price. Price increase but output decrease.

Question 8

Real GDP formula

Answer 8

Nominal GDP x (Price index base year/Price index current year)

Question 9

Why you need nominal GDP?

Answer 9

Nominal is need to calculate real GDP taking into account the price index

Question 10

What will happen to the AS curve if a country produces more capital goods?

Answer 10

The AS curve shift to the right

Question 11

What happens if a country can’t pay its debt?

Answer 11

The country must pay with collateral like land of resources

Question 12

What is required to encourage workers to be more productive?

Answer 12

1. increase wage rates
2. increase the standard of living