Macroeconomics
13th Edition
ISBN: 9780134744452
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 6, Problem 23APA
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Explain the components of the new growth theory perpetual motion machine and the role of incentives.
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Which one of the following is the most accurate description of growth theory?
A) Growth theory tries to predict long-run growth rates of actual economies.
B) Growth theory studies only the proximate causes of growth such as capital and productivity.
C) Growth theory tries to explain both the causes and consequences of economic growth in the long-run.
D) The main objective of growth theory is to generate policy advise for governments.
Carefully explain the Solow Growth theory and its extended variations. That is, the basic Solow model and the model expanded to incorporate at least two other sources of economic growth.
critically discuss the similarities and differences in growth factors based on Adam Smith's, David Ricardo's, and Harrod-Domar's theories.
Chapter 6 Solutions
Macroeconomics
Ch. 6.1 - Prob. 1RQCh. 6.1 - Prob. 2RQCh. 6.1 - Prob. 3RQCh. 6.2 - Prob. 1RQCh. 6.2 - Prob. 2RQCh. 6.2 - Prob. 3RQCh. 6.3 - Prob. 1RQCh. 6.3 - Prob. 2RQCh. 6.3 - Prob. 3RQCh. 6.3 - Prob. 4RQ
Ch. 6.3 - Prob. 5RQCh. 6.3 - Prob. 6RQCh. 6.4 - Prob. 1RQCh. 6.4 - Prob. 2RQCh. 6.4 - Prob. 3RQCh. 6.5 - Prob. 1RQCh. 6.5 - Prob. 2RQCh. 6.5 - Prob. 3RQCh. 6 - Prob. 1SPACh. 6 - Prob. 2SPACh. 6 - Prob. 3SPACh. 6 - Prob. 4SPACh. 6 - Prob. 5SPACh. 6 - Prob. 6SPACh. 6 - Prob. 7SPACh. 6 - Prob. 8SPACh. 6 - Prob. 9APACh. 6 - Prob. 10APACh. 6 - Prob. 11APACh. 6 - Prob. 12APACh. 6 - Prob. 13APACh. 6 - Prob. 14APACh. 6 - Prob. 15APACh. 6 - Prob. 16APACh. 6 - Prob. 17APACh. 6 - Prob. 18APACh. 6 - Prob. 19APACh. 6 - Prob. 20APACh. 6 - Prob. 21APACh. 6 - Prob. 22APACh. 6 - Prob. 23APACh. 6 - Prob. 24APACh. 6 - Prob. 25APA
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- Discuss the Solow Growth Model and carefully explain how its critical components impact the model. (Include graphs and equations where necessary)arrow_forwardIn the framework of endogenous growth theory, which of the following mechanisms is primarily responsible for sustained economic growth without the necessity of external inputs?a) The accumulation of physical capital through savings and investment.b) Technological innovation and the knowledge spillover effect.c) Increases in labor supply through population growth.d) Exploitation of natural resources and raw materials.Uploading 3rd time. Again and again got ai answer. Please provide valuable answerarrow_forwardApproaching the Industrial Revolution (IR) in Britain from the viewpoint of the Solow Growth Model (Y=ALaKbTg) how did the IR affect the different components included in the model? Group of answer choices Total Factor Productivity increased slightly and its growth stayed consistently above zero The main change for labour L was a shift in the IR from agriculture to services The capital stock K remained flat as a result of industrialization Output Y started to grow exponentiallyarrow_forward
- Critically analyse the Solow Growth Model and show how it explains the growth during the transitional dynamics. Does the model predict that poor economies always grow faster than rich economies? Explain.arrow_forwardWhy one nation experiences economic growth and another does not is a question that has intrigued economists since Adam Smith wrote An Inquiry into the Nature and Causes of the Wealth of Nations in 1776. Explain why each of the following would limit economic growth.a. The politically connected elite secure a large share of a country’s output and put the proceeds into foreign banks.having a small political elite that makes all the calls and decisions will lead to a small economic elite. b. The national philosophy is “Live for the moment and forget about tomorrow.” c. The government closes all of the schools so more people will be available for work.d. The country fears military invasion and spends half of its income on military gooarrow_forwardChoose the correct statement about economic growth theories. A. Modern-day Malthusians point to global warming and climate change as reasons to believe that eventually real GDP per person will decrease. B. Classical growth theory tells us profit is the spur to technological change. C. According to new growth theory, growth occurs because knowledge and physical capital do not experience diminishing returns. D. New growth theory is sometimes called Malthusian theory.arrow_forward
- Choose the following opton: 1) In the very long run, across the next fifty years, a country’s economic standard of living as measured by Real GDP Per Person can grow steadily as a result of sustained growth in one of the following two values. The correct focus of growth policy will be to promote: (a) Labor Productivity (b) Total Labor Effort 2) The correct answer to Q#1 is a consequence of which feature of any country’s economy. In the very long run, fifty years and beyond: a) Total Labor Effort (Aggregate Labor Hours) can grow faster than a country’s Population. b) Total Labor Effort (Aggregate Labor Hours) cannot grow faster than a country’s Population.arrow_forwardPlease no written by hand and no emage The past few decades have seen a number of definitions or interpretations of the term development. These have been influence by the ideological orientation of its proponents and the dominant growth theory during the period in which the definition was framed. Using an ideological orientation of your choice and a specific time period, discuss one interpretation of development.arrow_forwardIn the Solow growth model, carefully explain the convergence hypothesis. In your answer, describe possible causes of income convergence, and the evidence of convergence across the world.arrow_forward
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