AU11 Midterm 1 Review
1. Explain the difference between economic growth and economic development. Define extensive growth. Define intensive growth
A) Economic growth is defined by increases in GDP.
B) Whereas, economic development is more of a vague measure usually incorporating social measures such as literacy rates or life expectancy as a means of measuring a country's level of development.
C) Extensive Growth, is based on the expansion of the quantity of inputs in order to increase the quantity of outputs
D) Intensive Growth is based on the expansion of the quality of inputs
2. List 2 data sources researchers use to estimate historical standards of living and explain what they can infer from these sources. List three indicators of economic development other than National Income measures (NI, GDP, or GNP, level, growth rate, or per capita) that are of interest to economists and explain what can be inferred from each of these indicators.
A) Anthropometric history and GDP per Capita.
1) Human physical stature is a useful supplementary indicator of well-being. Height and weight are components and a relatively easily measured indicator of biological welfare.
2) Countries with higher GDP may be more likely to score highly on measures of welfare, including life expectancy.
B) CPI – Inflation,
3. Explain in detail 3 weaknesses of per capita GNP (or GDP) as a measure of economic well-being. Although this measure has the flaws you just listed (and others) it is the most oft-referenced statistic when considering standard of living differences across countries. Why?
A) The GDP is a measure of market activity; as such it excludes anything that does not have a price attached, as well as black-market activity. Unpaid housework, volunteer work, child care, barter and the illegal drug trade are only a few contributors to the economy that are not included in the GDP
B) If one were... [continues]
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