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AP Economics

AP Economics. Mr. Bernstein Module 37: Long Run Economic Growth April 7, 2014. AP Economics Mr. Bernstein. Long Run Economic Growth Objectives - Understand each of the following: How we measure long-run economic growth How real GDP has changed over time

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AP Economics

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  1. AP Economics Mr. Bernstein Module 37: Long Run Economic Growth April 7, 2014

  2. AP EconomicsMr. Bernstein Long Run Economic Growth Objectives - Understand each of the following: • How we measure long-run economic growth • How real GDP has changed over time • How real GDP varies across countries • The sources of long-run economic growth • How productivity is driven by physical capital, human capital, and technological progress

  3. AP EconomicsMr. Bernstein Real GDP Per Capita • Real to separate changes in total goods and services from effects of changes in price levels • Per Capita to isolate effects of changes in population • Usually not policy goal • Related to standards of living

  4. AP EconomicsMr. Bernstein Real GDP Per Capita

  5. AP EconomicsMr. Bernstein Growth Rates • Growth rates compound • Rule of 70: • 70/growth rate = number of years for GDP to double

  6. AP EconomicsMr. Bernstein Why do some economies grow faster than others? • Productivity, productivity, productivity • Real GDP Per Capita only grows when the average output per worker grows • How can worker productivity increase? • Physical Capital – ie better tools or software • Human Capital – ie better training or educations • Technology – ie application of knowledge

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