12. Based on the aggregate production function model, we can be certain output will increase if a. the total factor productivity increases while the amount of labor and physical capital stock of the country remain constant. b. the physical capital stock of the country decreases, the total factor productivity remains constant, and the amount of labor increases. c. the amount of labor increases while the total factor productivity and physical capital stock of the nation decrease. d. the total factor productivity and amount of labor increase while the physical capital stock of the

12. Based on the aggregate production function model, we can be certain output will increase if a. the total factor productivity increases while the amount of labor and physical capital stock of the country remain constant. b. the physical capital stock of the country decreases, the total factor productivity remains constant, and the amount of labor increases. c. the amount of labor increases while the total factor productivity and physical capital stock of the nation decrease. d. the total factor productivity and amount of labor increase while the physical capital stock of the

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter20: Economic Growth In The Global Economy

Section: Chapter Questions

Problem 2P

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Similar questions

For a high-income economy like the United States, what aggregate production function elements are most important in bringing about growth in GDP per capita? What about a middle-income country such as Brazil? A low-income country such as Niger?
Real GDP in 2015 was SAR 12,247 billion. It was SAR13,206 billion in 2018. The population of Saudi Arabia increased from 22.9 million to 25.4 million over this time. a. Determine the actual GDP per person for 2015 and 2018. How much did output per individual increase throughout this time, on average? b. What would real GDP have been in 2018 if real GDP had increased by 3% year from -2015 to 2018?
14. If output is described by the production function Y = AK0.2L0.8, then the production function has: Select one: A. Constant returns to scale and the share of labor in GDP is 0.2. B. increasing returns to scale and the share of labor in GDP is 0.2. C. Decreasing returns to scale and the share of labor in GDP is 0.8. D. constant returns to scale and the share of labor in GDP is 0.8.
economic Suppose that an economy’s production function is Cobb–Douglas with parameter a=0.3. a. What fractions of income do capital and labor receive? b. Suppose that immigration increases the labor force by 10 percent.What happens to total output (in percent)? The rental price of capital? The real wage? c. Suppose that a gift of capital from abroad raises the capital stock by 10 percent.What happens to total output (in percent)? The rental price of capital? The real wage? d. Suppose that a technological advance raises the value of the parameter A by 10 percent. What happens to total output (in percent)? The rental price of capital? The real wage?
Consider the following data on Prices and Quantities of T-Shirts and Pajamas 4. What wasthe growth rate ofNominalGDP between 2016and 2017? 5. Was the growth rate of real GDP higher or lower that the growth rate of nominalGDP?Explain
1. Why the use real GDP is preferred by economists over nominal GDP to gauge economic well-being? (Word count: 100 words max.) 2. Consider the following data on the Pakistan economy: Nominal GDP GDP Deflator Year (in billions of rupees) (base year 2012) 2018 21,501 111.4 1998 9,163 76.3 What was the growth rate of nominal GDP between 1998 and 2018? (Hint: The growth rate of a variable X over an N-year period is calculated as [(Xfinal/Xinitial)1/N – 1] x 100). What was the growth rate of the GDP deflator between 1998 and 2018? What was real GDP in 1998 measured in 2012 prices? What was real GDP in 2018 measured in 2012 prices? What was the growth rate of real GDP between 1998 and 2018? Was the growth rate of nominal GDP higher or lower than the growth rate of real GDP? Explain.
Assume that an economy currently has a nominal GDP of $500 billion. If the economy were to grow at 3%, calculate what nominal GDP will be in five years, ten years, twenty years, and forty years if it is able to sustainthat same growth rate each year.
1. Considering the determinants of productivity, list and explain some things that would tend to prohibit or limit a poor country’s ability to catch up with rich ones. 2. Economist believe there is a strong correlation between productivity and the standard of living? Discuss. [HINT: In your answer, be sure to explain what productivity and standard of living mean. Make a list of things that determine labour productivity and explain how each of them have an impact on the standard of living.]
Suppose an economy begins in steady state. By what proportion does per capita GDP change in the long run in reponse to each of the following changes? Production function is Y=AK^1/3L^2/3 a. Investment rate doubles b. depreciation rate falls by 10% c. Productivity level rises by 10% d. Earthquake destrys 75% of the capital stock e. Generous immigration policy lead the population to double
9 An island nation is in a steady state. A major hurricane passes over the nation and destroys half of its capital stock. Using the Solow Model for growth, what happens to gross domestic product (GDP), investment, and net investment in the short run and the long run? Illustrate with a figure and explain.
Assume an economy where there are two producers: a wheat producer and a bread producer. In agiven year, the wheat producer grows 3 million tonnes of wheat, of which 2.5 million tonnes aresold to the bread producer at $30 per bushel, and 0.5 million tonnes are stored by the wheatproducer to use as seed for next years crop. The bread producer produces and sells 100 millionloaves of bread to consumers for $3.50 per loaf. Determine GDP in this economy during this yearusing the product and expenditure approaches.
Chapter 24: Question for ReviewIf the price of imported French wine rise, is the CPI or the GDP deflator affected more? Why?Chapter 25: Problem 2Suppose that society decided to reduce consumption and increase investment.a. How would this change affect economic growth?b. What group in society would benefit from this change? What group might be hurt?Chapter 28: problem 5Economists use labor-market data to evaluate how well an economy is using its most valuable resource-its people. Two closely watched statistics are the unemployment rate and the employment-population ratio (calculated as the percentage of the adult population that is employed). Explain what happens to each of these in the following scenarios. In your opinion, which statistic is the more meaningful gauge of how well the economy is doing?a. An auto company goes bankrupt and lays off its workers, who immediately start looking for new jobs.b. After an unsuccessful search, some of the laid-off workers quit looking for new…