4.2 Discussion

4.2 Discussion

Getting Started

In this assignment, you will learn about the determinants of long-run economic growth for an economy and how small differences in average annual growth rates through compounding (evidenced through application of “the rule of 70”) add up to large differences in real GDP in nations over long periods of time. You will also analyze the impact changes in macroeconomic activity have on individual business decision making. Lastly, you will discover the role saving, investment, and the financial system have on both the macroeconomy and microeconomy.

Upon successful completion of this discussion, you will be able to:

• Discuss the implications of the “rule of 70” for long-run economic growth.
• Discuss the implications of fluctuations in macroeconomic activity on the strategies implemented by specific businesses.

Instructions

1. In your textbook, Macroeconomics, read:
   1. Chapter 10, “Economic Growth, the Financial System, and Business Cycles”(SEE ATTACHMENTS)
2. Navigate to the threaded discussion and respond to the following prompts:
   1. After reading through the section of your textbook, “Can a Recession Be a Good Time for a Business to Expand?”: (SEE ATTACHMENTS)
      1. Explain why (despite it being counter-intuitive for any particular business to do so) the best time for a business to expand may well be during a recession.

• Discuss the implications of the “rule of 70” for the long-term economic well-being of a nation.

70. Assume you are now 30 years of age. You wish to retire at age 65 and can achieve an average annual growth rate of 7%. Choose an initial amount of money for investment and calculate how much money you would have by retirement by applying “the rule of 70.” Discuss whether you thought this retirement money was sufficient.

3. Be specific in your responses and use personal examples to frame your writing.
4. Use in-text citations and APA format for direct quotes and references to the reading. Show all of your work in your submission for this activity.
5. Your postings should also:
   1. Be well developed by providing clear answers with evidence of critical thinking.

 

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