11.The Harrod-Domar model of growth key ingredients are: a. The depreciation rate is endogenous to the level of per capita income. b. The capital-output ratio is decreasing in the level of per capita income in a country. c. The population growth rate is independent of the level of per capita income in a country. d. All of the above
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11.The Harrod-Domar model of growth key ingredients are:
a.
The
b.
The capital-output ratio is decreasing in the level of per capita income in a country.
c.
The population growth rate is independent of the level of per capita income in a country.
d.
All of the above
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- Assuming a country’s economy maintains an 8% rate of growth, young adults starting at age 20 would see the average standard of living in their country more than double by the time they had reached age __________. Question options: a) 30 b) 60 c) 50 d) 40 Country Alpha and Country Beta initially have the same real GDP per capita. Country Alpha experiences no economic growth, while CountryBeta grows at a sustained rate of 5 percent. In 14 years, Country Alpha’s GDP will be approximately _________ that of Country Beta. Question options: a) triple b) double c) one-half d) one-fourthBased on our discussion of the determinants of economic growth, answer the following questions: • ’Devoting a larger share of national output to investment would help restore rapid economic growth and rising living standards.’ Based on our discussion of the determinants of economic growth, do you agree with the above statement? Explain why. • What could the policymakers (i.e., government, central bank) do to increase the investments in the economy? • Do you think that increasing the saving rate could help to increase the economic growth? Explain why. • Do you think that increasing the saving rate is always helpful? I.e., could we increase the saving rate to, say, 90 %? What could be some of the drawbacks of increasing the saving rate to a very high level? Explain.10.In the Solow model of economic growth, a country with a higher rate of capital depreciation will, ceteris paribus, have a steady-state equilibrium withA. lower output per worker.B. higher capital to labour ratio.C. the same capital to labour ratio.D. more investment. PROVIDE A BRIEF WRITTEN EXPLANATION JUSTIFYING YOUR CHOICE.
- Consider the following information about Country A. Per Capita Income = USD 1000 Consumption = USD 800 Capital Stock = USD 5000 Estimate the following. 1.Amount of Savings 2.Savings Rate 3.Incremental Capital Output Ratio 4.Economic Growth according to Harrod-Domar ModelQuestion 5.A critically explains the cost of growth.1. New growth theory (i.e., endogenous growth theory developed by 2018 Nobel Prize Links to an external site.winner Paul Romer Links to an external site.) is the theory that: Group of answer choices a. our unlimited wants will lead us to greater productivity and perpetual economic growth due to choices in pursuit of profits. b. when a decrease in labor productivity decreases real GDP per person the new prosperity brings a population explosion. c. the population contraction brings real GDP per person to a higher level. d. the clash between an exploding population and limited resources will eventually bring economic growth to an end.
- 3. Consider the Basic Solow growth model with a Cobb-Douglas production function and no technological change for the economy china. In this island economy, capital’s share α= 0.3, the annual depreciation rate on capital δ = 0.08 and the annual population growth rate n = 0.02. Suppose that this is the year 2017, and the economy is in the steady-state with GDP (Y) = 200 bananas, and capital stock K = 400 bananas. [Feel free to use any form of exponentiation that works best for you] Project the equilibrium level of GDP for 2050. Calculate the market value of fixed capital (K) in 2050 on a gross basis. Using the steady-state conditions, solve for the saving rate (s*) that is consistent with a stable steady-state.a) If you are given a choice to live in a country with high level of GDP and low growth rate or to live in a low level of GDP and a high growth rate, which option would you choose and why? b) Assume a hypothetical society that decides to reduce consumption (production of consumption goods) and increase investment (production of capital goods). How would this change affect economic growth? What groups in society would benefit from this change? What groups might be hurt? kindly solve all partsExplain the importance of research about the standard of living and the endogenous growth model in a country. Why the standard of living is related to Solow Growth model?
