AP Economics – 3/05/19

I.  Bellwork

A.  Annual economic growth hits 3 percent, defying predictions of Trump critics

Summarize the article explaining its significance, what it is attributed to, and the  critics responses.

II.  Objectives:

• Illustrate changes in productivity using an aggregate production function
• Discuss how growth has varied among several important regions of the world and explain why the convergence hypothesis applies to economically advanced countries

III.  Discussion: Productivity and Growth Pgs. 373-382

• Aggregate production function:  Tech x Physical capital per worker x Human capital per worker
• Diminishing Returns to physical capital
• Economic Freedom Quality of Life [MIRROR]
• Natural resources impact on economic growth
• Economic growth disparity (East Asia, Latin America, & Africa)

IV.  Classwork:  Due today or -5 tomorrow

A.  Questions:

1. Explain diminishing returns to physical capital and provide an example of how it can occur. 2pts
2. P.378  FYI Explain the information technology paradox and how it is resolved. 2pts
3. P.381 FYI Explain the Convergence hypothesis.  the problem with the theory, and why conditional convergence is needed. 3pts

B.   MC page 382-383 MC 1-5

C.  P383 FRQ #2 a, b, c, & d (Draw a graph for each question with a small explanation) Watch video below

Module 38 Notes: Aggregate Production Function

AP Economics