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Econ 102 > Week 2 - Economic Growth > Flashcards

Week 2 - Economic Growth Flashcards

1
Q

Ireland increases investment in its physical capital by 15%, while at the same time, South Sudan gets a grant and increases investment in physical capital by 15% as well. Which country will experience a greater impact on productivity as a result of this investment?

A

South Sudan will have a greater impact as it has less capital.

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2
Q

Which of these are examples of property rights being enforced?
I. a new homeowner building a house on their neighbor’s land
II. the police returning a stolen car
III. Jerry filing a patent so no one can copy his new product

A

II and III

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3
Q

For many years, Thomas Edison and General Electric faced no competition in selling their new product, electric light bulbs. Edison invested in the creation of a modern cost-effective electric light bulb. Why would the government encourage a monopoly for General Electric and the light bulb?

A

By granting temporary monopolies, the government encourages innovation and new ideas. Think of a temporary monopoly as a temporary patent, it shouldn’t last forever

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4
Q

The production function

A

Output Y is from Capital (K) labour (L) and human capital (H) that goes into technology

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5
Q

Technology

A

how efficient inputs are turned into outputs

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6
Q

Capital (K)

A

tools, machinery & structure

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7
Q

Labour (L)

A

the number of people working

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8
Q

Human capital (H)

A

the training and education the working people have

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9
Q

production function

A

Y = f(L, H, K)

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10
Q

factors that explain differences in GDP levels

A
  • Investment in Physical capital
  • Population growth rates
  • Human capital
  • Technology growth
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11
Q

does increasing population alone increase economic growth

A

NO

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12
Q

what factors of economic growth would be impacted by abundant stocks of oil? (NATURAL RESOURCES)

A
  • Investment in Physical capital
  • Population growth rates
  • Human capital
  • Technology growth
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13
Q

what factors of economic growth would be impacted by the level of trade?

A
  • Investment in Physical capital
  • Population growth rates
  • Technology growth
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14
Q

what factors of economic growth would be impacted by low birth rates?

A
  • Population growth rates
  • Human capital
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15
Q

what factors of economic growth would be impacted by culture or social norms?

A
  • Investment in Physical capital
  • Population growth rates
  • Human capital
  • Technology growth
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16
Q

what factors of economic growth would be impacted by a high malaria rate?

A
  • Investment in Physical capital
  • Population growth rates
  • Human capital
17
Q

what factors of economic growth would be impacted by policies that support innovation?

A
  • Technology growth
18
Q

Aggregate production function and per-worker production function

A

Draws production vs. a variable per person. Always intersects at the origin (no free lunch)

19
Q

Diminishing returns to physical capital

A

Exhibited by aggregate production function as graph bows.

20
Q

Best example of technology

A

division of labour - specialization that increases economic efficiency. An example of comparative advantage

21
Q

Increase in physical capital would move the apf

A

along the curve up

22
Q

Increase in technology would move the apf

A

shift up

23
Q

increasing population would move the apf

A

along the curve down - due to physical capital/person decreasing

24
Q

Increase in physical capital and technology would move the apf

A

along the curve up and shift up

25
Q

sources of long-run economic growth

A
  • Labour productivity
  • Physical capital
  • Human capital
  • Technology
26
Q

Frederick Taylor

A

Scientific management: allocating inputs efficiently (think Ford)

27
Q

Occupational segregation

A

Must be reduced for an efficient economy

28
Q

Institutions

A

create rules and laws

29
Q

Natural resource curse

A

describes how resource-rich countries often end up poor

30
Q

Is a lower population growth rate good for economic growth and why?

A

Yes, becasue more people shares inputs and that’s less efficient (quality > quantity)

31
Q

Rule of 70

A

doubling time = 70/annual growth rate

Econ 102 (5 decks)

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