Using the law of motion for physical capital accumulation (K), what is the amount of capital for the next period if the amount of physical capital today is 20 and Investment is 15 (Assume a depreciation rate of 10%) a) 23 b) 33 c) 34 d) 35
Using the law of motion for physical capital accumulation (K), what is the amount of capital for
the next period if the amount of physical capital today is 20 and Investment is 15 (Assume a
a) 23
b) 33
c) 34
d) 35
3- Using the law of motion for physical capital accumulation (K), what is the steady state level of
capital when investment is 10? (Assume a depreciation rate of 10% and remember that physical
capital is constant at the steady state)
a) 100
b) 50
c) 120
d) 123
4- What is the key difference between catching up growth and cutting edge growth?
a) Cutting edge growth is based on capital accumulation while catching up growth is based
on technological advances
b) Cutting edge growth is based exclusively on natural resources unique to every country
c) Cutting edge growth is based on innovation, new ideas. Catching up growth is based on
physical capital accumulation
d) None of the above
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