A more realistic version of convergence is conditionalconvergence, which tells us that:O a. Different countries will end up with differenttechnologies, population growth rates, etc., butnonetheless have the same steady-state levelsof capital per worker and output per worker.b. None of the other choices is correct.All poor countries will eventually catch up toricher countries, albeit very slowly.O d. Because countries have differingcharacteristics (population growth, saving rate,etc.), they will approach different steady-statelevels of output per worker.

Convergence refers to an approach that the nations move toward the same steady state where economic…

Answered: A more realistic version of convergence…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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Suppose Country A currently has more output and capital than Country B. However, Country A has no technological growth while Country B has persistent technological growth. Assume that the two countries are similar in all other variables. According to the Solow growth model with technological progress, we can expect that: O a. At some future point, Country B will have a higher income per capita. O b. In the steady state, Country B will reach the same income per capita as Country A. All the other statements are false. c. O d. Since they have different steady states, the growth of output per effective worker in both countries will have different rates.
167. Explain how rapid population growth can contribute to rapid economic growth even when Solow and other models all show that population growth reduces the level of income in the early stage. *3-4 paragraphs*
If real GDP per capita is increasing, the rate of real GDP growth is: O less than the rate of population growth. O greater than the rate of population growth. less than the rate of inflation. greater than the rate of inflation.
The basic Solow growth model was initially used to help governments of very low income nations measure what source of real GDP growth? O a) Growth due to factor accumulation. b) Growth due to technological progress. Oc) Growth due to efficiency gains. d) All of the above
12. According to Solow's model of economic growth, what determines the growth rate of income per person for a nation that is not in its steady state? What determines the growth rate of income per person for a nation that is in its steady state? In what sense is technological progress necessary for sustained growth of income per person in Solow's model?
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Consider the Solow growth model with no population growth and no tech- nology growth, i.e., n = x = 0. Output is created by a Cobb-Douglas pro- duction function combining Labor, Lt, and capital, Kt, such that output Yt is given by Y₁ = A+ KL-a = = 2. Recall that, without population growth, Lt = Lo and assume that Lo Furthermore, recall that, without technology growth, At Ao and assume that A0 = 1. Assume that the savings rate is s = 0.4, the depreciation rate is = 0.15, and that the capital share is a = 0.3. A lower case letter denotes a variable in per capita. For example, kt = K₁/Lt. In the following questions, choose the closest number. What is the value of kss? (a) 40.6 (b) 4.1 c) 2.8 (d) 28
Consider the Solow growth model with no population growth and no tech- nology growth, i.e., n = x = 0. Output is created by a Cobb-Douglas pro- duction function combining Labor, Lt, and capital, Kt, such that output Yt is given by Y₁ = A+ KL₁-a = = Ao and Recall that, without population growth, Lt Lo and assume that Lo = 10. Furthermore, recall that, without technology growth, At assume that A0 = 2. Assume that the savings rate is s = 0.2, the depre- ciation rate is 8 = 0.1, and that the capital share is a = 0.3. A lower case letter denotes a variable in per capita. For example, kt= Kt/Lt. In the following questions, choose the closest number. What is the value of kss? (a) 72 (b) 27 (c) 7.2 (d) 2.7 What is the value of Yss for the Economy described in Question 7 (a) 36 (b) 3.6 (c) 2.7 (d) 27 Suppose that the economy described in Question 7 economy starts with Ко = 10. Choose the correct one for the change in capital over time. (a) fall (b) grow (c) Once dropped, it grows (d) unchange…
Which of the following best defines 'institutions' as they relate to economic development? O The formal and informal rules governing the organization of society. O Buildings and other major structures. O Long-lasting organizations and companies. O The formal branches of government.
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