Chapter 23

Question 0

Economic Growth Rate

Answer 0

Annual percentage change of real GDP

Question 1

Economic Growth

Answer 1

Sustained expansion of production possibilities measured as the increase in real GDP over a given period.

Question 2

Real GDP per person

Answer 2

Grows only if real GDP grows faster than the population grows.

Question 3

% change Real GDP per person

Answer 3

% change Real GDP - % change population

Question 4

Rule of 79

Answer 4

of years it takes for the level of a variable to double is approx 79 divided by the annual percentage growth rate of the variable.

Question 5

How Potential GDP grows:

Answer 5

GDP at which the country gas full employment.

Question 6

Aggregate Production Function

Answer 6

tells us how real GPD changes as the quantity of labour changes when all other influences on production is the same.

Question 7

Real wage Rate

Answer 7

money wage rate divided by the price level.

Question 8

Demand for labour

Answer 8

shows the quantity of labour demanded and the real wage rate.

Question 9

Supply of labour

Answer 9

shows the quantity of labour supplied and the real wage rate.

Question 10

Labour market

Answer 10

is in equilibrium at the real wage rate at which the quantity of labour demanded equals the quantity of labour supplied.