Economics Quiz - BRICs 2011, correct, income, growth

LBriscoe

Pick the correct response:

a) Where labor and population growth is rapid, income per capita needs to rise slowly to keep up with the growth of population.

b) Where labor and population growth is rapid, income per capita needs to rise faster to keep up with the growth of population.

c) Where labor and population growth is rapid, total GDP needs to rise faster to keep up with the growth of population.



Edited 1 time(s). Last edit at Thursday, April 7, 2011 at 02:11PM by inbead.

skycfa

its A. If income rises too fast, there would need to be an influx of capital from foreign investors to keep up with the population growth. Where else would the money come from?

Therefore, if you want to keep up with population growth (assuming its already happening), given no assumptions that capital investment into the country is growing, the growth of income per capita needs to be slow.

dyga

cpk123 Wrote:
-------------------------------------------------------
> there is a difference between "tends to grow" and
> "needs to grow".
>
> It cannot "Need to grow" more slowly... Tends to
> grow slowly because of reasons already discussed.
> To make the economy grow faster - it NEEDS to grow
> more quickly.


agree 1000 % was thinking the same exact thing............needs to and tends to are 2 different things

mcmc

anyone else think of this when they studying "tha Bric da Bricks?!?!"

http://www.youtube.com/watch?v=hrfQJXXH7HA

(for all of you squares, wait until the 30 second mark)

i know Wake is with me on this one.



Edited 1 time(s). Last edit at Thursday, April 7, 2011 at 07:53PM by SkipE99.

canadiananalyst

I don't think your statment A and your answer from the book are stating the same thing.

thommo77

The country will be broke quickly if the population and income per capita increase rapidly at the same time.

strikethree

Aha, its A. Book 3 page 194 "Where labor force and population growth is rapid, income per capita tends to rise "more slowly" as higher investment is needed just to keep up with population growth."

I had to read it three times, just to make sure. This is the kind of stuff we would most likely see on the exam.



Edited 1 time(s). Last edit at Thursday, April 7, 2011 at 05:07PM by inbead.

skycfa

If the income per capita rises too faster, can it cause inflation?

Chuckrox

b -skipped that chapter too. How important a chapter do you guys think it is

Windjammer

B but I skipped that chapter.