Econ 203 Exam 2 TAMU questions with correct answers

Real GDP Growth Rate CORRECT ANSWER [real GDP per capita(cy)-Real GDP per capita(py)]/ (Real GDP per capita (py)) x 100% OR Nominal GDP Growth Rate- Inflation Rate- Population Rate Compounding Formula CORRECT ANSWER GDP(yearA)=GDP(YearB)x(1+Growth rate)^(A-B) Rule of 70 CORRECT ANSWER Years until income doubles= 70/ Real GDP Growth Rate Components of Productivity CORRECT ANSWER Physical capital, human capital, tech improvements, and natural resources Convergence Theory CORRECT ANSWER Countries that start out poor will grow faster than rich ones and eventually converge to the same growth rate Public Policies that Promote Economic Growth CORRECT ANSWER Investment and Savings, Education and Health, Tech Development Investment Trade-off CORRECT ANSWER Reduction in consumption to increase future production Foreign Direct Investment CORRECT ANSWER A firm runs part of its operation abroad or invests in another company abroa