The growth rate of real GDP in the United States rises from 4.2% to 4.4%. Explain and calculate how this increase in the growth rate of real GDP affects the number of years it will take for real GDP to double
What will be an ideal response?
The "Rule of 70" states that the number of years it takes for GDP to double is equal to 70 divided by the growth rate of real GDP. Given this formula, at a growth rate of 4.2%, it will take 70/4.2 = 16.67 years for GDP to double. If the growth rate increases by two-tenths of a percent (to 4.4%), the number of years it will take for GDP to double will decrease to 70/4.4 = 15.9 years.
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Amy can produce either 5000 pounds of cheese or 20 cars per year. Mike can produce either 5000 pounds of cheese or 10 cars per year. By the principle of comparative advantage, Mike should specialize in producing
A. cars. B. neither cheese nor cars. C. both cheese and cars. D. cheese.
Economic profits disappear quickly when a market is
A) perfectly competitive. B) monopolistically competitive. C) a monopoly. D) an oligopoly.
Which of the following will be recorded as a credit entry in the U.S. balance of trade in merchandise account?
a. A U.S. car manufacturer selling a car to a resident of India. b. A French wine manufacturer selling wines to a distributor in Seattle. c. A U.S. investor investing in Japanese stocks. d. A U.S. steel manufacturer importing iron ore from Zambia. e. A U.S. resident buying diamonds from a diamond manufacturer in Kenya.
Which of the following is the term for an innovative new product or production technology that disrupts the status quo in a market, leading the innovators to earn more income and profits and the other firms to either lose income and profits, or come up with their own innovations?
a. disruptive technological change. b. disruptive market change. c. disruptive trade change. d. disruptive transfer change.