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Answer to Question #59252 in Macroeconomics for Jhoana Hernandez

Question #59252
1. Since 1980, jobs that were lost in the durable goods sector of the economy (manufacturing) have been more than offset by gains in service sector jobs. Many economists claim this has widened the gap between the rich and the poor. Explain 2 reason for the increasing gap between rich and poor.

2. In spite of productivity increases since the 80’s, real wages have declined for most Americans. State two reasons.

3. State 3 reasons why real GDP is NOT a good indicator of the country's growth and economic well-being.
Expert's answer
1. There are some reasons for the increasing gap between rich and poor.
1) The development of different technologies and creating patents for them gives an advantage to big corporations and rich countries, so the countries with no technology are less developed and its population is poorer.
2) The increased power of international corporations makes competition with them for small firms more and more difficult.

2. In spite of productivity increases since the 80’s, real wages have declined for most Americans, because plants become more authomotized and more employees are needed in low-skilled service sector.

3. Real GDP is NOT a good indicator of the country's growth and economic well-being, because it only counts the value added of the economy, doesn't count changes in labor market and doesn't count the share of high-tech industries.

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