Name__________________ Date due__________date turned in___________
Posted on internet Monday 04_30
Chapter 12: Section 3 : Economic Growth
Date Due: 05_01 Pgs. 318 to 325
Graphs Fig.12.1;12.2;12.3;12.4;12.5;12.6.; 12.7 12.8. Global
nnection: pg.314 Skills for Life: page: 309 Fast Fact pg.305 and 323
ofile Andrew Carnegie pg.317; Case study pg.325:
Economic
Objectives: After studying this section you will be able to:
A. Analyze how economic growth is measured.
B. Understand capital deepening and how it contributes to economic growth.
C. Analyze how saving and investment are related to economic growth
D. Summarize the impact of population growth, government, and foreign
trade on economic growth.
E. Identify the causes and impact of technological progress.
Main Idea: Economic growth is a steady, long-term increase in a nation's
real GDP that tends to raise living standards. Primary contributors to
long-term growth include capital deepening, saving and investing, and
advances in technology. The other factors that affect economic growth are
population, government, and foreign trade.
Measuring Economic Growth
1. The percentage change of real GDP over a given period of time is the
basic measure of a nations economic_______ rate. The growth rate between
1990 and 2000 was what percent?____
2. Real GDP divided by the total population is called__ __ __ __. Per
capita means for___ __. What is the best measure of the nation’s standard
of living____ __ __ __. For the standard of living to rise real GDP
must be rising faster than the______.
3. Real GDP per capita represents the average____per person in an economy
but it tells us nothing about how that output is______.
Capital Deepening
4. The process of increasing the amount of capital per worker is
called______ ____. The amount of output produced per worker is called
labor________. Capital deepening is one of the most important sources
of________ in modern economies. Capital deepening can be physical_______
or human_______. As output increases per worker and also tends to increase
workers’__________.
Saving and Investment
5. Income is not used for consumption is called_______. Output can only be
consumed or_______ whatever is not consumed must be________, in other
words saving is = to_______. The proportion of disposable income that is
saved is called called the______ rate. Since saving is equal to
investment, and the savings will be borrowed for expansion by firms and
individuals, the more savings higher amounts of capital per worker, the
higher amounts of capital per worker, the more output, and a higher
standard of living. The United States has a low savings rate, where do we
get the money for expansion?________
Population, Government, and Trade
6. If a nations population grows while the supply of capital
remains________ the amount of capital per worker will_______. This is the
opposite of capital deepening and will lead to lower living_______.
Conversely nation with low population growth and expanding capital stock
will enjoy a significant capital_____and a higher standard of living.
7. Consumption spending, such as wars, government services leads to a
reduction in savings which is to say a reduction in ________ which will
lead to less _____ per worker and a the lower standard of living. However
collecting tax revenues to invest in public goods such as roads,
telecommunications and other infrastructure leads __________ deepening.
8. When the value of goods that a country imports is higher than the value
of goods that it exports this is called a trade______. The structures and
equipment purchased by businesses are called_____goods and this can lead
to capital_______. If trade deficits are used for short-term consumption
there will not be any capital________.
Technological Progress
9. An increase in efficiency gained by producing more output without using
more inputs is called________. Increased productivity means that we can
produce more output with the same amounts of land, ______, and ______.
with technological progress society can enjoy a higher real___per capita,
which leads to a higher standard of living.
10. The economist that developed a method for measuring the impact of
technological progress on economic growth was________. Five factors influence
technological progress and therefore economic growth a) scientific research b)
innovations such as patents help fuel the logical progress c) scale of the
market, larger markets provide more incentives for innovation since the potential
for profits are greater d) education and experience e) natural resource use
turning useless raw materials into usable resources.