Economic Growth Ajadaf经济增长ajadaf.pptVIP

Economic Growth Our goals for this chapter include: Understanding economic growth in several ways Utilizing and understanding the business cycle and cyclical and non-cyclical fluctuations Causes and definitions of all types of unemployment Defining inflation, its causes Looking at and describing the ranges of inflation Knowing who is hurt and helped by inflation Understanding the relationship between unemployment and inflation Growth Two definitions of economic growth: A. increase in real GDP over time B. increase in real GDP per capita over time Usually the second is considered a more accurate measure in comparing living standards growth Growth is one of the more important economic goals for an economy because growth means more goods and services with which to satisfy needs and wants. Growth lessens the burdens of scarcity on a society. growth A simple rule to use in trying to understand the speed with which economic growth can take place is called “the rule of 70”. If you have an annual average growth rate percentage, dividing it into 70 will give you an approximate time in which the real GDP of an economy will double. For instance, if the US is growing at 3% and maintains that growth over time, one could expect the economy to double in 23-24 years in terms of real GDP. growth So, where does economic growth come from? Most economist believe that there are 2 main sources of growth: A. increasing inputs (growth in resources) B. increasing productivity of existing inputs (working more efficiently) Most growth in modern economies comes from B. Growth in the US While economic growth in the US is unstable, it has generally been averaging 3% for the last half century or so. That being said, we have to keep in mind that some things are not measured such as quality of products, increase or loss of leisure time, environmental effects, or the human impact of technologies. Recent US Economic Growth Unlike the 20th century, the 21st century has posed growth problems for the