7. There are large global inequalities in the amount of capital different countries have. Part of that is a result of choices by multinational businesses in where to build their factories. Should an American business like Ford build its next factory in the United States or in another country like Ghana? Many considerations go into this decision, but one of the most important ones is how much extra output the business would generate if it located an additional unit in the United States as opposed to India or another country. For these question assume that all countries have the same aggregate production function: Y = A x VK x Vī but that countries vary in their capital stocks, labor forces, and TFP. X. Many people argue that all countries have access to the same technology. They argue that for the most part most ideas are on the internet which can be accessed from anywhere. So, for now, assume A = 1 in all countries. country K K/L ratio U.S. 691 158.2 4.37 Ghana 4.21 13.2 0.319 Calculate the MPK for the two countries. Based on this model where would you get the best return on your investment? a. U.S., the capital-rich country b. Ghana, the capital-poor country C. same in both

7. There are large global inequalities in the amount of capital different countries have. Part of that is a result of choices by multinational businesses in where to build their factories. Should an American business like Ford build its next factory in the United States or in another country like Ghana? Many considerations go into this decision, but one of the most important ones is how much extra output the business would generate if it located an additional unit in the United States as opposed to India or another country. For these question assume that all countries have the same aggregate production function: Y = A x VK x Vī but that countries vary in their capital stocks, labor forces, and TFP. X. Many people argue that all countries have access to the same technology. They argue that for the most part most ideas are on the internet which can be accessed from anywhere. So, for now, assume A = 1 in all countries. country K K/L ratio U.S. 691 158.2 4.37 Ghana 4.21 13.2 0.319 Calculate the MPK for the two countries. Based on this model where would you get the best return on your investment? a. U.S., the capital-rich country b. Ghana, the capital-poor country C. same in both

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter20: Economic Growth

Section: Chapter Questions

Problem 12SCQ: Why dues productivity growth in high-income economies not slow down as it runs into diminishing...

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7. Calculate the compound annual growth rates of goods exports and GDP of developed, developing countries, Canada and BRIC for the decade 2006-2016 (just use end years data to calculate the growth. Present your result either in a table or graphs. What do these growth rates tell about globalization vs. national economic growth rates for these groups? 8. How have US shares of Canada's exports, and imports of goods and services, and inward and outward FDI stock changed in the last two decades? Show with two graphs, one for trade and the other for FDI) Most of these data can be downloaded from World Bank, UNCTAD and CANSIM databases.
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