a. Referring to the table below and using the "Rule of 70," comment on long-term changes in the standard of living in the United States?
b. Would you rather live in the United States of 1900 with an annual income of $1million or in the United States of 2012 with an annual income of $50,000? (Both incomes are stated in 2012 dollars).
Briefly show and explain why?
c. Increases in real GDP per capita depend on increases in labor productivity.
What drives labor productivity?
d. In developed economies, economic growth depends more on technological change than on increases in capital per hour worked.
What drives technological change?
e. Briefly, what crucial role can/should government play to foster long-term economic growth?
f. An economy - by definition - is always operating at potential GDP.
i. True or False?ii. Briefly explain why?
g. In a closed economy, or in an economy where net exports are zero (NX=0), total Savings must equal total Investment (S=I).
i. True or False? ii. Why?
h. If the government runs a balanced budget, where does all of S (National Savings), come from?
i. The article quoted from in question 1d referred to a general de-levering of the U.S. household. It follows, then, that the US economy as a whole must be de-levering. True? False? Why?