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Chapter 8 Economic Growth
Economic Growth- A sustained expansion of production possibilities measured as the increase in the real GDP over a given period.

Economic Growth Rate- the Annual percentage change in real GDP
- Economic Growth Rate= Real GDP2007- Real GDP 2006/ Real GDP 2006
- Real GDP in 2007= 11,567.3 Billion Dollars ( 2000 chain weighted index)
- Real GDP in 2006= 11,319.4 Billion Dollars ( “ “ “ )
- Ex) (11,567.3-11,319.4)/11,319.4= 0.0219 (2.19%)

Per capita Real GDP- Real GDP divided by the population aka Real GDP per person.
Ex) real GDP2007=11,567.3 billion
Real GDP2006=11,319.4 Billion
Grew 2.2%
~~~~~~~
Population2007= 301.6 million Real GDP2007= 11,567.3billion/301.6million=38353.12
Population2006= 298.8 million Real GDP2007= 11,319.4billion/298.8million=37,882.8
Grew 0.94% Grew 1.24%

Real GDP Growth- Population Growth~= Growth of Real GDP per person (approximates)
How do we know if these rates of are good or bad, fast or slow?
Look at it this was
How long will it take at this rate for us to double our economy?

Rule of 70- the number of years it takes for the level of a variable to double is approximately 70 divided by the annual percentage growth rate of the variable.
Ex) Real GDP growth 2006/07= 1.24% 70/1.24%= 56.4 years
Real GDP growth 2005/06= 1.87% 70/1.87%= 37.4 years (The less the better)
But the economic growth varies from year to year to how do we measure that?
Question should we, why is the economic growth so fast in china, what are the source of economic growth?

Labor Productivity- (one of the main keys to economic growth) the quantitity of real GDP produced by an hour of labor
-Labor productivity depends on
-Capital stock ex) right tool...