Active Learning 1:

Suppose the real GDP/person in

Fastcountry grows at an annual rate of

←
2% and the real GDP/person in
Slowcountry grows at an annual rate of
1%.
How many years does it take for real
GDP/person to double in Fastcountry?
In Slowcountry?
In 1930, real GDP/person=$2000 in
Fastcountry. How much will it be in year
2000?
Active learning 1

fast country 70-2=35 #

Slow
country
70-1=70 #

fast
county in 2000
-22,000$ ✗
(1+0.02)^(2,000-1,930)
-17,999.12 #
 Active Learning 2: True or False

Alexis and Tara both mine salt.- Alexis mines 300

pounds o in 20 hours. Tara mines 400 pounds in 40
hours. Alexis’s productivity is greater than Tara’s.
This difference could be explained by Alexis
having less physical capital than Tara.
greater than Alexis's
: false It's should
o .
be Tara's productivity ways
.
 Active Learning 3:
Which of the following policies do you think would
be most effective at boosting growth and living standards
in a poor country over the long run?
0
a. Offer tax incentives for investment by local firms
b. Offer tax incentives for investment by foreign firms
c. Give cash payments for good school attendance
d. Crack down on government corruption
e. Restrict imports to protect domestic industries
 GDP →
☒_¥¥¥-¥*
Active Learning 5:

A. If a Japanese company opens a new factory in

foreign direct
South Korea, it makes _______________ investment.
The factory will make a bigger impact on South
Korea’s ____
GDP than on its _____.
GNP Why?
B. Suppose Japanese-based Toshiba Corporation
builds and operates a new computer factory in
the United States. Future production from such an
GDP more than it
investment will increase U.S. _____
GNP
increases U.S. ______. Why?