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Chapter 20: Q 14. (page 496)

How much should a nation be concerned if its

rate of economic growth is just 2% slower than other

nations?

Short Answer

Expert verified

They should be concerned.

Step by step solution

01

Step 1. Definition.

The growth in the production compared from one period to another is referred to as economic growth.

02

Step 2. Explanation

If there is a difference of 2% in economic growth rates in long run then it is surely a matter of concern because in long run the 2% difference may become and will always become large difference over time.

There are various developed countries which are even now working on their standards of living so for all developing countries must work hard to catch up with the developed countries and this 2% difference makes a lot of difference in the long run.

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Most popular questions from this chapter

What are the "advantages of backwardness" for economic growth?

Education seems to be important for human capital deepening. As people become better educated and more knowledgeable, are there limits to how much additional

benefit more education can provide? Why or why not?

Why is investing in girls’ education beneficial for growth?

For a high-income economy like the United States,

what aggregate production function elements are most important in bringing about growth in GDP per capita? What about a middle-income country such as Brazil? A low-income country such as Niger?

How is the concept of technology, as defined with the aggregate production function, different from our everyday use of the word?
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