International data show a positive correlation between political stability and economic growth. a. Through what mechanism could political stability lead to strong economic growth? b. Through what mechanism could strong economic growth lead to political stability? Ans 8
a. Political stability could lead to strong economic growth by making the country attractive to investors. The increased investment would raise economic growth. b. Strong economic growth could lead to political stability because when people have high incomes they tend to be satisfied with the political system and are less likely to overthrow or change the government.
In many developing nations, young women have lower enrollment rates in secondary school than do young men. Describe several ways in which greater educational opportunities for young women could lead to faster economic growth in these countries.
Greater educational opportunities for women could lead to faster economic growth in these developing countries because increased human capital would increase productivity and there would be external effects from greater knowledge in the country.
Second, increased educational opportunities for young women may lower the population growth rate because such opportunities raise the opportunity cost of having a child.
From 1950 to 2000, manufacturing employment as a percentage of total employment in the U.S. economy fell from 28 percent to 13 percent. At the same time, manufacturing output experienced slightly more rapid growth than the overall economy. a. What do these facts say about growth in labor productivity (defined as output per worker) in manufacturing? b. In your opinion, should policymakers be concerned about the decline in the share of manufacturing employment? Explain. ANSWER:
a. If output is rising and the number of workers is declining, then output per worker must be rising.
b. Policymakers should not be concerned as long as output...
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