Question

1)Define intensive and extensive growth. In what periods could we characterize American growth as being intensive? In what periods could we characterize American growth as being extensive?

2)Consider Domar’s model of labor coercion. He considers the labor markets in the USA and the degree of labor coercion for free white labor and enslaved black labor. Which group(s)’s labor market institutions would he see as puzzling or not? Why?

Answer 1

1)Define intensive and extensive growth. In what periods could we characterize American growth as being intensive? In what periods could we characterize American growth as being extensive?

Answer- Intensive and extensive growth-

Extensive growth- It refers to the expansion of quantity of inputs to increase output or GDP.

Only increasing GDP due to factors like more population etc is extensive growth which is considered fruitful in the long run as it exhausts the scarce resources

Intensive growth- it refers to the increase in output due to technological advancements ,betters skills or by adding more labor which will increase the production possibility or production capacity.

In intensive growth there is Higher output on per unit of input which enhanced productivity. Intensive growth is fruitful in the long run as it emphasis on maximum utilisation of resources to increase the output.

The period of 1960s had the most extensive growth ,that is from 1961 to 1969 back then the expansion was of 53%.

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