1. To gauge living standards across countries with populations of different sizes, economists use __________.
2. In poor countries, the relative prices for non-traded goods (such as household services) to traded goods (such as jewelry) are__________ than in rich countries.
3. Economists who have studied economic growth find strong evidence for convergence among European counties since 1890. __________ (True/False)
4. At a 2 percent annual growth rate in GDP per capita, it will take __________years for GDP per capita to double.
5. Future Generations. Some economists say that economic growth involves a trade-off between current generations and future generations. If a current generation raises its saving rate, what does it sacrifice? What will be gained for future generations?
6. Will the Poorer Country Catch Up? Suppose one country has a GDP that is one-eighth the GDP of its richer neighbor. But the poorer country grows at 10 percent a year, while the richer country grows at 2 percent a year. In 35 years, which country will have a higher GDP?
7. Understanding Convergence in a Figure. Suppose the line in Figure was horizontal. What would that tell us about economic convergence?

8. Growth in Per Capita GDP. The growth rate of real GDP per capita equals the growth rate of real GDP minus the growth rate of the population. If the growth rate of the population is 1 percent per year, how fast must real GDP grow for real GDP per capita to double in 14 years?
9. Economic Growth and Global Warning. Basing your answer on the research reported in the text, is it likely that India is more vulnerable now to increases in temperatures than it will be in 20 years?
10. Economic Growth, World Markets for Entertainment, and Inequality. With worldwide economic growth, markets are much larger, so movies and music have much larger audiences. Could this lead to increased inequality for entertainers? Discuss.
11. Comparing Economic Performance Using International GDP Data. The Web site for the Penn World Tables (http://pwt.econ.upenn.edu) contains historical economic data. Using this link, compare the relative growth performance for real GDP per capita of France and Japan from 1950 to 2000. Do the data support the theory of convergence for these two countries?



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December 4, 2012

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