Economic Growth - Learning Objectives

After studying the portion of this blog devoted to the macroeconomic policy goal of economic growth, you should be able to:

· define macroeconomics and macroeconomic policy.
· list the three primary goals of macroeconomic policy.
· list the two primary tools of macroeconomic policy.
· define monetary policy and fiscal policy.
· define and explain the relationship between standard of living and economic growth.
· define gross domestic product (GDP), which is also called nominal GDP or money GDP.
· define and explain the difference between final products and intermediate products.
· explain why economic growth is important, from an historical perspective and a geographical perspective.
· state how U.S. GDP compares to other countries in the world. (U.S. GDP is larger.)
· define per capita GDP, explain how it is calculated, and explain why it is a better measure of standard of living than GDP.
· state how U.S. per capita GDP compares to other countries in the world. (Luxembourg is the only country with a higher per capita GDP.)
· state the equation that relates the present and future values of GDP based on the growth rate and the number of years and use it to calculate economic growth.
· calculate the future value of gross domestic product (GDP) from the present value, rate of growth, and number of years.
· state the rule of 70 and use it to approximate the amount of time it takes for an economy’s GDP to double.
· list and explain the sources of economic growth.
· define productivity, physical capital, human capital, and technology.
· list and explain the composition of GDP based on the types of goods and services produced.
· define durable goods, non-durable goods, services, and structures.
· list and explain the composition of GDP based on the purchaser of the newly produced goods and services.
· define consumption, investment, government purchases, transfer payments, exports, imports, and net exports.
· define gross national product (GNP) and explain how it differs from GDP.
· define real GDP and explain its relationship to nominal GDP and the inflation rate.
· define base year.
· define per capita real GDP and explain how it is calculated
· calculate nominal GDP from a table of prices and outputs of one or more products from one or more years.
· calculate real GDP from a table of prices and outputs of one or more products from one or more years.
· list and explain at least five criticisms of using GDP as a measure of economic welfare.
· explain how the government can use monetary policy to promote economic growth.
· explain how the government can use fiscal policy to promote economic growth.

Economic Growth - Topics