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Some poor countries grow faster than the US- what is this phenomena called

convergence

as countries become richer, they spend less on food. what happens to the relative price of food?

declines

what scenario does malthusian trap refer to

a scenario where an economy is stuck with too little resources for a growing population, so the economy stagnates

why are stable political institution a necessary precondition for persistent growth?

because they guarantee property rights and thus incentivise innovation

name the three stages of technological progress

invention, innovation, diffusion

what is the nairu

the non accelerating inflation rate of unemployment, refers to the medium run or natural unemplyment rate at which inflation stays constant

what happens to the unemployment rate if the participation rate declines and employment remains the same

declines

what does lucas critique refer to

policies that do not take into account the response of private agents are ineffecive

the intersection of the AS and AD curve denotes the medium run equlibrium..is this statement correct?

no, expected prices have to equal actual prices

what does monetary neutrality mean

monetary variable has no effect on real variables in the medium run, monetary policy cannot impact real variable in the medium run

name two functions of money

means of transactions, store of value, for speculation purposes

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