Assignment

Part 1

Consider a nation in which the volume of goods and services is growing by 5% per year:

• Analyze the impact of the high rate of growth on the nation.

o Explain how the high rate of growth is likely to affect the power and influence of the nation's government relative to other nations experiencing slower rates of growth.

o Explain how the 5% growth is likely to affect the nation's living standards.

- How does economic growth affect population growth?
- Will living standards necessarily grow by 5%, given population growth?

Part 2

• Use the concepts of gross investment and net investment to explain the differences between an economy that has a rising stock of capital and one that has a falling stock of capital.

• Explain how it is impossible for gross investment to be less than zero, even though net investment can be positive, negative, or zero. What real world examples can you provide?

Part 3

• Analyze the economic discrepancies between countries.

o Explain why some countries today are much poorer than other countries.

o Based on what you know and have learned about macroeconomic principles, are today's poorer countries destined to always be poorer than today's wealthy countries?

- If so, explain why.
- If not, explain how today's poorer countries can catch up to or even surpass today's wealthy countries.

Part 4

• Explain how, in general, a financial crisis can lead to a recession.
• Explain how, in general, a major new invention can lead to an economic expansion.

Organize your assessment logically with appropriate headings and subheadings. Support your work with at least 3 scholarly or professional resources and follow APA guidelines for your citations and references. Be sure you include a reference page.