Question

Question 51 pts

The very poorest LDCs have relatively

low rates of economic growth and relatively high rates of population growth.

high rates of economic growth and relatively low rates of population growth.

low rates of both population growth and economic growth.

high rates of both population growth and economic growth.

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Question 61 pts

Capital is rising at 2% per year while the quantity of labor rises at 3% per year. Solow would predict:

there will be a rise in output due to the rise in capital.

there will be a fall in output or at least a fall in output per worker due to a falling capital labor ratio.

there will be double rise in output since both components are increasing.

fall in output due to this economy saving and investing too much.

Question 101 pts

Productivity rises in the 1990s in part due to computers.

True

False

Answer 1

- low rates of economic growth and high rate of population growth.

Less developed countries have low GDP , hence low economic growth. Population growth is higher because women in LDCs do not have access to sex education and contraceptions.

- there will be fall in output or atleast a fall in output per worker due to falling capital labor ratio.

Output per worker depends on capital per labor. When labor increases at higher rate, the ratio falls and output per worker decreases.

- true

In 1990s productivity increased and this increase came along the introduction of computers in 1990s. Thus we can attribute increase in productivity to introduction of computers.