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Chapter 18: Q. 1 - Critical Thinking Questions (page 409)

In terms of the basic arithmetic of economic growth, through what mechanism do improvements in labor and capital productivity help to boost the rate of growth of per capita real GDP?

Short Answer

Expert verified

Improvements in labor and capital productivity help to accelerate the rate of growth of per capita real GDP. Workers who are frequently interrupted at work benefit the most from telework.

Step by step solution

01

Step 1:Introduction to GDP growth

The monetary value of all finished goods and services produced in a country over a given time period is known as the gross domestic product (GDP).. GDP provides an economic snapshot of a country and is used to estimate the size and growth rate of an economy. GDP can be calculated using expenditures, production, or income in one of three ways.

02

The mechanism do improvements in labor and capital productivity 

Appropriate telework schedules boost labor productivity

Telework improves life satisfaction, which in turn improves productivity.

Telework, on the other hand, adds to the stress of juggling work and home responsibilities.

Telework is more efficient for workers who commute by train for an extended period of time.

Telework has a greater impact on workers who are frequently interrupted at work.

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Most popular questions from this chapter

What does this tell us about a comparison of the average rate of growth of real GDP since 2000 in emerging and developing nations compared with advanced nations?

Suppose that every 500 billion of dead capital reduces the average rate of growth in worldwide per capita real GDP by 0.1 percentage point. If there is 10 trillion in dead capital in the world, by how many percentage points does the existence of dead capital reduce average worldwide growth of per capita real GDP?

The annual rate of growth of real GDP in a developing nation is 0.3percent. Initially, the country's population was stable from year to year. Recently, however, a significant increase in the nation's birthrate has raised the annual rate of population growth to 0.5percent.

a. What was the rate of growth of per capita real GDP before the increase in population growth?

b. If the rate of growth of real GDP remains unchanged, what is the new rate of growth of per capita real GDP following the increase in the birthrate?

In principle, how could a nation maintain a relatively high rate of economic growth even if it also has a relatively high rate of population growth?

Consider Table 18-1. Based on the basic arithmetic of economic growth, what were the average annual rates of real GDP growth since 1990 for those nations experiencing positive rates of annual growth of per capita real GDP?
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