Основы экономики. Земскова Л.П. - 24 стр.

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24
PROBLEMS
1. Suppose an economy is hit by unexpected inflation of 5 percent. Identify at
least three groups that gain, and show in each case who loses.
2. Which do you think is more costly, expected or surprise inflation?
3. Specify a set of government policies that would definitely stop inflation.
Describe the policies exactly and indicate the risks you see in implementing
them.
4. Suppose a $100 loan is made in the expectation of no inflation, with the
lender receiving $105. Inflation then turns out to be 10 percent. What is the
real value of the loan repayment, including interest? Who gains, who loses,
and how much compared to what they had expected?
LECTURE 12. ECONOMIC GROWTH
1. Living standards in the industrialized economies have increased rapidly and
substantially over the 19
th
century. Per person GDP has risen by a factor of
about 8 in the United States since 1870; in Japan per capita income has risen
by a factor of 21. Total GDP rose by a factor of 50 in the United States over
the same period.
2. The high growth rates of per capita income observed in the last 100 years
cannot have been going on for very long by historical standards. They are
associated with the shift from agricultural to industrial production.
3. Growth in per person GDP in the United States probably overstates the
historical growth in standards of living. Long-term comparisons of living
standards are made difficult by the introduction of new products. And there is
no reason to think that happiness is proportional to the consumption of
material goods and services.
4. The process of economic growth involves changes in the economy’s potential
output, which are best understood from the viewpoint of the production
function. The level of potential output increases as the quantities of inputs
increase and as technical knowledge improves.
5. Invention and innovation take place largely in response to the profit
motive. Firms and government finance research and development (R&D)
activities. About 2.6 percent of GNP is devoted to R&D spending in the
United States; about half of that is government-financed. Most government
R&D spending is for defense. The United States devotes about the same
share of GNP to R&D as do other industrial countries. Estimated rates of
return to R&D spending are very high.
6. Over the long run, most of the increase in output per worker hour in the
industrial countries has been the result of technical progress.
7. Policies to improve the rate of productivity increase focus on increasing
investment in physical capital and encouraging technical progress through
R&D spending.

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