Course: Macroeconomics - Solow Growth Model NOTE: Please consider for question b) that the two main pillars of human capital are Health and Education. The World Bank has launched a human capital project to promote economic growth in economies. This project proposes the construction of a humancapital indicator, an excerpt of which is as follows:Economy Probability ofExpected yearsHarmonizedYears of schoolingAdultProportion of childrenHumansurvival to 5of educationlearning resultsperformed as a functionsurvivalunder 5 years old withoutCapital Indexyearsof learningratestunting(HCI)U.S.A.0,9913,352311,10,900,980,76Chile0,9912,84669,60,910,980,67Brazil0,9911,74087,60,860,940,56Nigeria0,908,23254,30,650,560,34China0,9913,24569,70,920,920,67a)Explain the importance of human capitalb)You are asked to classify the components in the two main pillars that comprise human capital and explain brieflyc) Select 2 economies from the table below, considering that the human capital factor equals the index presented, obtain the ratio and explain theincome differences using the Solow equations.

The Solow model is an economic growth model that examines the change in the output level in an…

Answered: Please consider for question b) that…

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Please consider for question b) that the two main pillars of human capital are Health and Education.

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Economic Growth

It means the rise in the manufacturing levels of a country’s products/services over a while. It is calculated in terms of the real income of the people of the country. When the production of products/services begins, the manufacturers will hire employees, which in turn raises the income of the people and it will also raise the buying power, this eventually leads to the circulation of money that directly helps in the increase in the Gross Domestic Product (GDP). Thus, GDP is calculated by economists to calculate the growth in the country.

Question

Course: Macroeconomics - Solow Growth Model

NOTE: Please consider for question b) that the two main pillars of human capital are Health and Education.

The World Bank has launched a human capital project to promote economic growth in economies. This project proposes the construction of a human
capital indicator, an excerpt of which is as follows:
Economy Probability of
Expected years
Harmonized
Years of schooling
Adult
Proportion of children
Human
survival to 5
of education
learning results
performed as a function
survival
under 5 years old without
Capital Index
years
of learning
rate
stunting
(HCI)
U.S.A.
0,99
13,3
523
11,1
0,90
0,98
0,76
Chile
0,99
12,8
466
9,6
0,91
0,98
0,67
Brazil
0,99
11,7
408
7,6
0,86
0,94
0,56
Nigeria
0,90
8,2
325
4,3
0,65
0,56
0,34
China
0,99
13,2
456
9,7
0,92
0,92
0,67
a)
Explain the importance of human capital
b)
You are asked to classify the components in the two main pillars that comprise human capital and explain briefly
c) Select 2 economies from the table below, considering that the human capital factor equals the index presented, obtain the ratio and explain the
income differences using the Solow equations.

Branch of economics that analyzes the behavior and performance of an economy as a whole. It focuses on the study of aggregates and evaluates changes related to unemployment, gross domestic product, inflation, monetary and fiscal policies of the government.

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