By the end of this chapter you will be able to:
1. Outline the rationale of modern supply-side policies and evaluate the effectiveness of such policies.
2. Define economic growth and identify the three sources of economic growth.
3. Interpret the information presented by an aggregate production function.
4. Describe the causes of diminishing marginal productivity.
5. Describe the insights of endogenous growth theory.
6. Outline the issues involved in achieving sustainable long-run growth.
7. Discuss the “lasting lessons” of macroeconomics.
In 1728, Johnathan Swift, satirist and author of Gulliver’s Travels, sowed an intellectual seed that bore fruit in a Washington D.C. restaurant two and a half ...