Question

42) The Solow Model: GDP = F(A, K, eL) gives countries hope they can 'catch-up', this...

42) The Solow Model: GDP = F(A, K, eL) gives countries hope they can 'catch-up', this is called:

a) Seigniorage

b) Real GDP

c) China Effect

d) Conditional Convergence

42a) K refers to the capital investment/depth. In general the greater the capital the GDP is:

a) None of the other answers

b) K does not affect GDP

c) Larger

d) Smaller

42b) K has Limited effect because of:

a) K does not wear out

b) None of the other answers

c) Economic Depreciation

d) K has no effect on GDP

Homework Answers

Answer #1

42.

The catching up effect is also called conditional convergence. It gives the idea that countries which are poorer will grow much faster than the richer countries and ultimately the growth rates of all the countries will converge.

Hence, option d is the right answer.

42a

Usually larger the capital, the GDP is larger as well. Increased capital means that the economy can produce more output with the available machinery.

Hence option c is the answer.

42b

Capital has a limited effect as capital depreciate over time. There's wear and tear of capital which must be taken into account. As time passes, this becomes more and more pronounced.

Hence option c is the answer.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
2. Consider a numerical example using the Solow growth model: The production technology is Y=F(K,N)=K0.5N0.5 and...
2. Consider a numerical example using the Solow growth model: The production technology is Y=F(K,N)=K0.5N0.5 and people consume after saving a proportion of income, C=(1-s)Y. The capital per worker, k=K/N, evolves by (1+n)k’=szf(k)+(1-d)k. (a) Describe the steady state k* as a function of other variables (b) Suppose that there are two countries with the same steady state capital per worker k* and zero growth rate of population(n=0), but differ by saving rate, s and depreciation rate, d. So we assume...
Use the H-augmented Solow model to determine the a) instantaneous impact on GDP per capita, b)...
Use the H-augmented Solow model to determine the a) instantaneous impact on GDP per capita, b) instantaneous impact on consumption per capita, c) long-run impact on GDP per capita, d) long-run impact on consumption per capita, e) impact on long-run GDP per capita growth rate, and f) impact on long-run GDP growth rate of a permanent and instantaneous increase in the fraction of national resources devoted to investment in human capital, sh. Assume the country begins at its steady state...
Consider a numerical example using the Solow growth model: The production technology is Y=F(K,N)=K0.5N0.5 and people...
Consider a numerical example using the Solow growth model: The production technology is Y=F(K,N)=K0.5N0.5 and people consume after saving a proportion of income, C=(1-s)Y. The capital per worker, k=K/N, evolves by (1+n)k’=szf(k)+(1-d)k. (a) Describe the steady state k* as a function of other variables. (b) Suppose that there are two countries with the same steady state capital per worker k* and zero growth rate of population(n=0), but differ by saving rate, s and depreciation rate, d. So we assume that...
1.Check all the conditions below that are offered as explanations for why we might expect countries'...
1.Check all the conditions below that are offered as explanations for why we might expect countries' real GDP per capita to converge, i.e. low income countries to catch up to higher income countries. < low income countries can "borrow" technology that has already been developmed < international travel is allowed < countries will all end up using a single currency < higher income countries will buy goods from lower income countries < law of diminishing returns means that countries with...
Consider two countries J and K. Both of them have equal amount of gross domestic product...
Consider two countries J and K. Both of them have equal amount of gross domestic product (GDP) measured in USA dollars. If the cost of living is cheaper in country K than in country J, which country do you think has a larger GDP in Purchasing Power Parity (PPP) measured in international dollars? a) It is difficult to know this b) Both have still equal GDP PPP c) Country J d) Country K When we say ‘Trade is pro-competition’, what...
6) When a country does not meet the requirements of the SGP, it is declared in...
6) When a country does not meet the requirements of the SGP, it is declared in excessive deficit by the Council. What is the sanction imposed Select one: a. Fine of 0.2 per cent of the delinquent’s GDP. Resources are frozen until the procedure is lifted b. Fine of 0.5 per cent of the delinquent’s GDP, and an additional 0.2 per cent of GDP for further non-compliance c. Fine of 0.5 per cent of the delinquent’s GDP. Resources are frozen...
Sign In INNOVATION Deep Change: How Operational Innovation Can Transform Your Company by Michael Hammer From...
Sign In INNOVATION Deep Change: How Operational Innovation Can Transform Your Company by Michael Hammer From the April 2004 Issue Save Share 8.95 In 1991, Progressive Insurance, an automobile insurer based in Mayfield Village, Ohio, had approximately $1.3 billion in sales. By 2002, that figure had grown to $9.5 billion. What fashionable strategies did Progressive employ to achieve sevenfold growth in just over a decade? Was it positioned in a high-growth industry? Hardly. Auto insurance is a mature, 100-year-old industry...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT