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Long-Run Economic Growth: Context Rich Problem

Michelle Kim; Glendale Community College
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This material is replicated on a number of sites as part of the SERC Pedagogic Service Project


This is a scenario-based problem where students are asked to recall their learning about long-run economic growth to apply to a specific developing country.

Learning Goals

Students will learn to recognize the determinants of long-run economic growth for a country with specific conditions and provide suggestions for improving its economy.

Context for Use

This activity can be used in a college level Principles of Macroeconomics class of any size. You can choose to have the students work in pairs for a more engaged discussion, individually as an in-class assignment, or outside of class as homework. If conducted in class, roughly 30-40 minutes will be needed.

Description and Teaching Materials

You are on a summer vacation in a foreign country called Macrolandia and on your way to the post office to send some post cards to friends and family back home (Their telephone service broke down a few days ago and is still in the process of repair. You thought post cards will be more personal and fun anyway though). Along the way, you are excited to find a very expensive Patek-Philippe watch lookalike for a price equivalent to $12, oh wait, $10, no, $7 (the exchange rate is crazy in fluctuation here) . . .

(Please see the attached file for the full text of the problem.)

Long-Run Economic Growth CRP (Microsoft Word 2007 (.docx) 12kB Mar26 12)

Teaching Notes and Tips


References and Resources

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