The mechanism that generates the growth in Solow model.

Question

Want to see more full solutions like this?

Answer 1

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 5, Problem 1RQ

To determine

The mechanism that generates the growth in Solow model.

Expert Solution & Answer

Explanation of Solution

The growth of the economy takes place along with the growth of productivity and output. The mechanism that generates the growth can be summarized as the capital accumulation. The capital accumulation increases the productivity and efficiency of an economy. This mechanism is appealing due to the fact that the machines are capable of continuous working with the programmed manner. This helps to deliver the higher output and longer working hours compared to the manual labor. Thus, the mechanism that generates the growth in the Solow model is capital accumulation and capitalism.

The capital depreciates at constant rate means that it is the issue that the firm faces in the short run. The capital stock does not keep growing due to the fact that there is capital depreciation. As bigger and bigger the capital gets, it becomes harder to produce higher output in the economy, which keeps the economy growing is known as the diminishing returns to scale. These two are the main factors that prevent the capital from providing the growth in the long run.

Economics Concept Introduction

Economic growth: Economic growth is the increase in the output of goods and services produced per head of the population over a period of time in an economy.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

What can the Solow model tell us about growth in the short term and in the long term? What is different between the Solow model and the endogenous growth model?

When was the Solow growth model developed and what was significant about that period? What did it predict that was significant at the time? When was the endogenous growth model developed? What did researchers observe in the world that led to its development? What is the main feature that differentiates the two?

How do macroeconomic theories evolve? What is the Solow growth model? How does technology affect growth? Why are institutoins the key to economic growth?

Answer 2

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 5, Problem 1RQ

To determine

The mechanism that generates the growth in Solow model.

Expert Solution & Answer

Explanation of Solution

The growth of the economy takes place along with the growth of productivity and output. The mechanism that generates the growth can be summarized as the capital accumulation. The capital accumulation increases the productivity and efficiency of an economy. This mechanism is appealing due to the fact that the machines are capable of continuous working with the programmed manner. This helps to deliver the higher output and longer working hours compared to the manual labor. Thus, the mechanism that generates the growth in the Solow model is capital accumulation and capitalism.

The capital depreciates at constant rate means that it is the issue that the firm faces in the short run. The capital stock does not keep growing due to the fact that there is capital depreciation. As bigger and bigger the capital gets, it becomes harder to produce higher output in the economy, which keeps the economy growing is known as the diminishing returns to scale. These two are the main factors that prevent the capital from providing the growth in the long run.

Economics Concept Introduction

Economic growth: Economic growth is the increase in the output of goods and services produced per head of the population over a period of time in an economy.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 5, Problem 1RQ

To determine

The mechanism that generates the growth in Solow model.

Expert Solution & Answer

Explanation of Solution

The growth of the economy takes place along with the growth of productivity and output. The mechanism that generates the growth can be summarized as the capital accumulation. The capital accumulation increases the productivity and efficiency of an economy. This mechanism is appealing due to the fact that the machines are capable of continuous working with the programmed manner. This helps to deliver the higher output and longer working hours compared to the manual labor. Thus, the mechanism that generates the growth in the Solow model is capital accumulation and capitalism.

The capital depreciates at constant rate means that it is the issue that the firm faces in the short run. The capital stock does not keep growing due to the fact that there is capital depreciation. As bigger and bigger the capital gets, it becomes harder to produce higher output in the economy, which keeps the economy growing is known as the diminishing returns to scale. These two are the main factors that prevent the capital from providing the growth in the long run.

Economics Concept Introduction

Economic growth: Economic growth is the increase in the output of goods and services produced per head of the population over a period of time in an economy.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 5, Problem 1RQ

To determine

The mechanism that generates the growth in Solow model.

Expert Solution & Answer

Explanation of Solution

The growth of the economy takes place along with the growth of productivity and output. The mechanism that generates the growth can be summarized as the capital accumulation. The capital accumulation increases the productivity and efficiency of an economy. This mechanism is appealing due to the fact that the machines are capable of continuous working with the programmed manner. This helps to deliver the higher output and longer working hours compared to the manual labor. Thus, the mechanism that generates the growth in the Solow model is capital accumulation and capitalism.

The capital depreciates at constant rate means that it is the issue that the firm faces in the short run. The capital stock does not keep growing due to the fact that there is capital depreciation. As bigger and bigger the capital gets, it becomes harder to produce higher output in the economy, which keeps the economy growing is known as the diminishing returns to scale. These two are the main factors that prevent the capital from providing the growth in the long run.

Economics Concept Introduction

Economic growth: Economic growth is the increase in the output of goods and services produced per head of the population over a period of time in an economy.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 5, Problem 1RQ

To determine

The mechanism that generates the growth in Solow model.

Expert Solution & Answer

Explanation of Solution

The growth of the economy takes place along with the growth of productivity and output. The mechanism that generates the growth can be summarized as the capital accumulation. The capital accumulation increases the productivity and efficiency of an economy. This mechanism is appealing due to the fact that the machines are capable of continuous working with the programmed manner. This helps to deliver the higher output and longer working hours compared to the manual labor. Thus, the mechanism that generates the growth in the Solow model is capital accumulation and capitalism.

The capital depreciates at constant rate means that it is the issue that the firm faces in the short run. The capital stock does not keep growing due to the fact that there is capital depreciation. As bigger and bigger the capital gets, it becomes harder to produce higher output in the economy, which keeps the economy growing is known as the diminishing returns to scale. These two are the main factors that prevent the capital from providing the growth in the long run.

Economics Concept Introduction

Economic growth: Economic growth is the increase in the output of goods and services produced per head of the population over a period of time in an economy.

Answer 6

Chapter 5, Problem 1RQ

To determine

The mechanism that generates the growth in Solow model.

Expert Solution & Answer

Explanation of Solution

The growth of the economy takes place along with the growth of productivity and output. The mechanism that generates the growth can be summarized as the capital accumulation. The capital accumulation increases the productivity and efficiency of an economy. This mechanism is appealing due to the fact that the machines are capable of continuous working with the programmed manner. This helps to deliver the higher output and longer working hours compared to the manual labor. Thus, the mechanism that generates the growth in the Solow model is capital accumulation and capitalism.

The capital depreciates at constant rate means that it is the issue that the firm faces in the short run. The capital stock does not keep growing due to the fact that there is capital depreciation. As bigger and bigger the capital gets, it becomes harder to produce higher output in the economy, which keeps the economy growing is known as the diminishing returns to scale. These two are the main factors that prevent the capital from providing the growth in the long run.

Economics Concept Introduction

Economic growth: Economic growth is the increase in the output of goods and services produced per head of the population over a period of time in an economy.

Answer 7

Chapter 5, Problem 1RQ

To determine

The mechanism that generates the growth in Solow model.

Answer 8

Expert Solution & Answer

Explanation of Solution

The growth of the economy takes place along with the growth of productivity and output. The mechanism that generates the growth can be summarized as the capital accumulation. The capital accumulation increases the productivity and efficiency of an economy. This mechanism is appealing due to the fact that the machines are capable of continuous working with the programmed manner. This helps to deliver the higher output and longer working hours compared to the manual labor. Thus, the mechanism that generates the growth in the Solow model is capital accumulation and capitalism.

The capital depreciates at constant rate means that it is the issue that the firm faces in the short run. The capital stock does not keep growing due to the fact that there is capital depreciation. As bigger and bigger the capital gets, it becomes harder to produce higher output in the economy, which keeps the economy growing is known as the diminishing returns to scale. These two are the main factors that prevent the capital from providing the growth in the long run.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Economic growth: Economic growth is the increase in the output of goods and services produced per head of the population over a period of time in an economy.

Answer 12

Ch. 5 - Prob. 1RQ Ch. 5 - Prob. 2RQ Ch. 5 - Prob. 3RQ Ch. 5 - Prob. 4RQ Ch. 5 - Prob. 5RQ Ch. 5 - Prob. 6RQ Ch. 5 - Prob. 7RQ Ch. 5 - Prob. 1E Ch. 5 - Prob. 2E Ch. 5 - Prob. 3E

The mechanism that generates the growth in Solow model.

Concept explainers

The mechanism that generates the growth in Solow model.

Explanation of Solution

Want to see more full solutions like this?

Chapter 5 Solutions