1 True/false questions Give a one sentence justification. 1. Adjusting for purchasing power parity tends to increase the measured income differences be- tween poor and rich countries. 2. According to the Malthusian model, an increase in productivity will lead to a larger population in the long run, but won't affect the level of income per capita in the long-run. 3. The decline in child mortality is the leading explanation for the decrease in fertility during the demographic transition. 4. Suppose that unobservable climate characteristics predict both the number of domesticable animal species and population density. Then the number of domesticable animals in a region doesn't satisfy condition 1 (relevance for being an instrumental variable for the number of years since the Neolithic transition. 2 Short questions 2. In 2021, India's GDP per capita was USD 2256, and 7248 in PPP dollars. For the same year, Brazil's GDP per capita was USD 7507 and 16031 in PPP dollars. Which country has the higher price index? According to the Balassa Samuelson hypothesis, which country has the higher relative productivity of tradable? 3. In the theoretical Malthusian model, the law of motion of population is given by Lt+1 = nt Lt. However, we use the equation Lt+1 = 2 (AX) (L₁)¹-a to solve the model. Explain how the two equations relate, and why we can't use the first one to solve for the evolution of population directly. 4. Suppose the utility function of parents is given by u(c, n, h) = (1 −y) lnc + y(ln n + Bln h), where c is consumption, n is number of children, and h is their human capital. As in the model we saw in class, h = h(e, g) where e is the level of education of the child and g is the growth rate of technology. Interpret the parameter 3. What does it mean for the cross derivative of h with respect to education and technology growth to be positive (heg > 0)?
1 True/false questions Give a one sentence justification. 1. Adjusting for purchasing power parity tends to increase the measured income differences be- tween poor and rich countries. 2. According to the Malthusian model, an increase in productivity will lead to a larger population in the long run, but won't affect the level of income per capita in the long-run. 3. The decline in child mortality is the leading explanation for the decrease in fertility during the demographic transition. 4. Suppose that unobservable climate characteristics predict both the number of domesticable animal species and population density. Then the number of domesticable animals in a region doesn't satisfy condition 1 (relevance for being an instrumental variable for the number of years since the Neolithic transition. 2 Short questions 2. In 2021, India's GDP per capita was USD 2256, and 7248 in PPP dollars. For the same year, Brazil's GDP per capita was USD 7507 and 16031 in PPP dollars. Which country has the higher price index? According to the Balassa Samuelson hypothesis, which country has the higher relative productivity of tradable? 3. In the theoretical Malthusian model, the law of motion of population is given by Lt+1 = nt Lt. However, we use the equation Lt+1 = 2 (AX) (L₁)¹-a to solve the model. Explain how the two equations relate, and why we can't use the first one to solve for the evolution of population directly. 4. Suppose the utility function of parents is given by u(c, n, h) = (1 −y) lnc + y(ln n + Bln h), where c is consumption, n is number of children, and h is their human capital. As in the model we saw in class, h = h(e, g) where e is the level of education of the child and g is the growth rate of technology. Interpret the parameter 3. What does it mean for the cross derivative of h with respect to education and technology growth to be positive (heg > 0)?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:1 True/false questions
Give a one sentence justification.
1. Adjusting for purchasing power parity tends to increase the measured income differences be-
tween poor and rich countries.
2. According to the Malthusian model, an increase in productivity will lead to a larger population
in the long run, but won't affect the level of income per capita in the long-run.
3. The decline in child mortality is the leading explanation for the decrease in fertility during the
demographic transition.
4. Suppose that unobservable climate characteristics predict both the number of domesticable
animal species and population density. Then the number of domesticable animals in a region
doesn't satisfy condition 1 (relevance for being an instrumental variable for the number of
years since the Neolithic transition.
Transcribed Image Text:2 Short questions
2. In 2021, India's GDP per capita was USD 2256, and 7248 in PPP dollars. For the same year,
Brazil's GDP per capita was USD 7507 and 16031 in PPP dollars. Which country has the
higher price index? According to the Balassa Samuelson hypothesis, which country has the
higher relative productivity of tradable?
3. In the theoretical Malthusian model, the law of motion of population is given by Lt+1 = nt Lt.
However, we use the equation Lt+1 = 2 (AX) (L₁)¹-a to solve the model. Explain how the
two equations relate, and why we can't use the first one to solve for the evolution of population
directly.
4. Suppose the utility function of parents is given by u(c, n, h) = (1 −y) lnc + y(ln n + Bln h),
where c is consumption, n is number of children, and h is their human capital. As in the model
we saw in class, h = h(e, g) where e is the level of education of the child and g is the growth
rate of technology. Interpret the parameter 3. What does it mean for the cross derivative of
h with respect to education and technology growth to be positive (heg > 0)?
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