2 Short questions1. Give an advantage and a disadvantage of using real GDP per capita (PPP) as a measure of wel-fare. Explain if the disadvantage you identified means the GDP in PPP over or underestimateswelfare.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 thehigher price index? According to the Balassa Samuelson hypothesis, which country has thehigher 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 thetwo equations relate, and why we can't use the first one to solve for the evolution of populationdirectly.4. Suppose the utility function of parents is given by u(c, n, h) = (1 −y) lnc + y(ln n + ß lnh),where c is consumption, n is number of children, and h is their human capital. As in the modelwe saw in class, h = h(e, g) where e is the level of education of the child and g is the growthrate of technology. Interpret the parameter 3. What does it mean for the cross derivative ofh with respect to education and technology growth to be positive (heg > 0)?

Measures of welfare in economics refer to metrics used to assess the well-being and standard of…

Answered: 1. Give an advantage and a disadvantage…

1. Give an advantage and a disadvantage of using real GDP per capita (PPP) as a measure of wel- fare. Explain if the disadvantage you identified means the GDP in PPP over or underestimates welfare.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Production And Growth

Section: Chapter Questions

Problem 5CQQ

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