Marcello asked:


I am wondering how people explain the growth in the worlds real GDP.

Are we creating wealth and if so how does this happen?

Is wealth coming from a bigger use of the worlds natural resources (which would suggest at some point that the worlds real GDP will be unable to grow when resources are diminished)?

Is there another reason?

WILLIAM

rose251585 asked:


Imagine an economy with the following details:
total financial wealth is $800m
real GDP,Y, is $1000m
the price level is 1
the quantity of money is $700m
economy’s demand function: Md/P=(0.8-i)Y where i is the interest rate on the economy’s bonds which mature in one year paying $1000.
Question: what price of bonds would bring equilibrium in the financial markets?

Emily