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AP Economics

This module explores the diverse long-run economic growth rates among countries, analyzing key factors such as physical capital, human capital, and technology. We will identify challenges to growth presented by limited natural resources, environmental issues, and the pursuit of sustainable development. Through examples like the significant impact of small differences in growth rates over time, we highlight how government policies can either promote or hinder productivity sources. By understanding these dynamics, we can better comprehend the complexities of economic growth.

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AP Economics

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  1. AP Economics Mr. Bernstein Module 39: Growth Policy: Why Economic Growth Rates Differ April 8, 2014

  2. AP EconomicsMr. Bernstein Growth Policy: Why Economic Growth Rates Differ Objectives - Understand each of the following: • The factors that explain why long-run growth rates differ so much among countries • The challenges of growth posed by scarcity of natural resources, environmental degradation, and efforts to make growth sustainable

  3. AP EconomicsMr. Bernstein Why Growth Rates Differ • The power of compounding means small differences in growth rates matter • $10,000 savings earning 3% over 30 years = $10,000*1.0330 = $24,273 • $10,000 savings earning 2.5% over 30 years = $10,000*1.02530 = $20,976 • 14% difference over time • Why do Growth Rates Differ? • Physical Capital, Human Capital and Technology

  4. AP EconomicsMr. Bernstein Why Growth Rates Differ • Government can promote – or block – all three sources of productivity • Physical Capital: Build infrastructure (roads, power grid,etc.); provide incentive for firms to invest in capital • Human Capital: Public or subsidized education • Technology: Grants and subsidies for research • Political Stability and Confidence-Building

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