EBK INTERNATIONAL ECONOMICS
7th Edition
ISBN: 9780134523866
Author: Gerber
Publisher: YUZU
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Question
Chapter 4, Problem 1SQ
To determine
Explain the relative labor or capital abundancy of two countries.
Expert Solution & Answer
Explanation of Solution
The capital labor ratio of the US can be calculated as follows:
The capital labor ratio of Canada can be calculated as follows:
The larger capital labor ratio means that the country is rich in capital, and it is more capital abundant. Here, the capital labor ration of the US is greater than that of Canada. Thus, the capital-abundant country is the US and labor-abundant country is Canada because of the higher labor capital ratio.
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Students have asked these similar questions
Construct a production possibilities curve for a hypothetical country. Put public capital goods per year on the vertical axis and consumer goods per year on the horizontal axis
Graphically explain the economy’s production possibility curve in terms of economic
growth.
QUESTION 37
ROBOTS
60
50
40
30
20
10
0
a
10
b
20
C
30
40
50
BEFR
37. Assuming robots represents capital goods and beer consumer goods, and the growth path of country 1 is from point (a) to (b) to (c), while country 2 goes from points (d) to (e) to (f), what can you
conclude about these countries?
a) Country 1 has a higher savings rate
b) Country 2 starts out with a higher standard of living
c) Country 2 has a higher rate of growth
d) Both (a) and (b) are correct
e) None of the above
Chapter 4 Solutions
EBK INTERNATIONAL ECONOMICS
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Similar questions
- What is the difference between extensive and intensive growth? Why was the Soviet Union successful in terms of extensive growth under Stalin, but failed to succeed in terms of intensive growth during the reform periods under Khrushchev and Gorbachev?arrow_forwardSuppose that country A and country B currently have identical production possibility frontiers, but that country A devotes only 5 per cent of its resources producing capital goods over each of the next 10 years, whereas country B devotes 30 per cent. Which country is likely to experience more rapid economic growth in the future? Illustrate using a production possibility frontier graph. Your graph should include production possibility frontiers for country A today and in 10 years, and for country B today and in 10 years.arrow_forwardWhat has happened to real GDP per person in the industrialized countries over the past century? What implications does this have for the average person?arrow_forward
- Why do Urban populations are capital accumulating whereas rural populations are capital consuming?arrow_forwardCountries that are at the technological frontier must __________ to increase living standards and therefore these economies tend to grow __________ relative to countries that are below the technological frontier. a) adopt technologies, slower b) innovate, faster c) innovate, slower d) adopt technologies, fasterarrow_forwardAnswer the following questions in your discussion response: What are the necessary ingredients for a nation to experience greater rates of economic growth, higher average standards of living, and a greater ability to compete in the global economy? That is, what could the U.S. do to achieve all this?arrow_forward
- True or false? Consider two economies that spend different shares of their gross domestic product to R&D activities. Is it true that the economy with a larger share of R&D spending grows faster in the long-run?arrow_forwardAccording to Figure 15.4, by what percentage did GDP per capita increase between 1820 and 1995 in North America? Latin America? Africa?arrow_forward"Given the rate at which scientists are making new discoveries, we will soon reach the point that no further discoveries can be made. Economic growth will come to a stop.” Do you believe this to be an accurate statement? If so, why? If not, why?arrow_forward
- Countries with high per capita incomes are sometimes called affluent economies. Do these affluent economies face the problem of scarcity?arrow_forwardBased on article "Technology and economic growth: From Robert Solow to Paul Romer" by Rui Zhao, Romer has successfully opened the black box and explained how technology can be produced by an economy without having to rely on external (exogenous) technology. Using the central equations of the Romer’s model. discuss how technology (A)t can be produced by a country to stimulate economic growth?arrow_forwardRuritania produces Widgets and Gizmos. If all of its factors of production are committed to making widgets exclusively, it can make 8 million units each year. If all of its factors are committed to making Gizmos exclusively, it can make 8 million units per year. Ruritania's Ministry of Growth has considered various plans to stimulate economic growth in the kingdom. Adjust the production possibilities frontier (PPF) on the graph to show the impact of a successful plan to improve the literacy rate. (Look at image)arrow_forward
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