Whether the given statement is true or not.

Question

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Answer 1

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 12, Problem 1QAP

a

To determine

To find: Whether the given statement is true or not.

a

Expert Solution

Explanation of Solution

Uncertain

Any change in input affects output but it depends on the stage of returns to scale of production. When there is increase in level of technology, it is not necessary that labor will be as effective as capital to affect output. There can be any possibility of impact on output due to change in inputs.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

b)

To determine

To find:

Whether capital per effective worker remains constant due to increase in rate of technological progress.

b)

Expert Solution

Explanation of Solution

True

To keep capital per effective worker constant, there is always a need for technological advancement. Firm must invest in their research and development department so that there is always a progress of technology. This is always to be done so that firms remains at steady state level of output.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

c)

To determine

To find:

Whether output per worker increases due to population growth.

c)

Expert Solution

Explanation of Solution

False

At steady state, output increases with the same rate as increase in population growth rate but output per effective worker remains constant. To remain at steady state, as population increases, output also increases so that economy remains at constant level.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

d)

To determine

To find:

Whether output per worker increases due to technological progress.

d)

Expert Solution

Explanation of Solution

True

At steady state level of output, capital per worker and out per worker remains constant. So, when there is progress in technology, that is capital, there is also a positive change in output per worker.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

e)

To determine

To find: Whether growth of output per effective worker increases due to higher saving rate.

e)

Expert Solution

Explanation of Solution

True

An increase in saving rate directly has a positive impact on capital stock and output level. A shift from lower steady state level of output to higher level of output increases leads to increase in the growth rate of output per worker, keeping population rate constant.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

f)

To determine

To find: Whether R& D spending is riskier than investing in new machines.

f)

Expert Solution

Explanation of Solution

True

It is riskier for firms to invest in research and development compared to new machines as the output generated is guaranteed in new machines. However, research and development outcome is suitable or not at current scenario and its development is questionable, therefore, it becomes risky.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

g)

To determine

To find: Whether private firms will engage in basic research or not.

g)

Expert Solution

Explanation of Solution

False

The decision to enter into research would also require the amount of money to be spent on component to translate into usable ideas for production. Thus, the feasibility of the research needs to be considered.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

h)

To determine

To find: Whether growth will come to an end or not.

h)

Expert Solution

Explanation of Solution

False

This statement does not have any adaptability or proof that growth will come to an end. Human being cannot predict the future. Hence, any statement without fact is false.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

i)

To determine

To find: Whether technology has played an important role in C’s economic growth or not.A

i)

Expert Solution

Explanation of Solution

False

The above statement is false as this is the only country in the world which produces and sells goods at relatively lower rate compared to other countries of the world. The level of technological progress and advancement has led this country to use human and natural resources efficiently.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

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Students have asked these similar questions

Asap please give detailed solution give explanation for wrong solutions also

Asap please

not use ai please

Answer 2

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 12, Problem 1QAP

a

To determine

To find: Whether the given statement is true or not.

a

Expert Solution

Explanation of Solution

Uncertain

Any change in input affects output but it depends on the stage of returns to scale of production. When there is increase in level of technology, it is not necessary that labor will be as effective as capital to affect output. There can be any possibility of impact on output due to change in inputs.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

b)

To determine

To find:

Whether capital per effective worker remains constant due to increase in rate of technological progress.

b)

Expert Solution

Explanation of Solution

True

To keep capital per effective worker constant, there is always a need for technological advancement. Firm must invest in their research and development department so that there is always a progress of technology. This is always to be done so that firms remains at steady state level of output.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

c)

To determine

To find:

Whether output per worker increases due to population growth.

c)

Expert Solution

Explanation of Solution

False

At steady state, output increases with the same rate as increase in population growth rate but output per effective worker remains constant. To remain at steady state, as population increases, output also increases so that economy remains at constant level.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

d)

To determine

To find:

Whether output per worker increases due to technological progress.

d)

Expert Solution

Explanation of Solution

True

At steady state level of output, capital per worker and out per worker remains constant. So, when there is progress in technology, that is capital, there is also a positive change in output per worker.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

e)

To determine

To find: Whether growth of output per effective worker increases due to higher saving rate.

e)

Expert Solution

Explanation of Solution

True

An increase in saving rate directly has a positive impact on capital stock and output level. A shift from lower steady state level of output to higher level of output increases leads to increase in the growth rate of output per worker, keeping population rate constant.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

f)

To determine

To find: Whether R& D spending is riskier than investing in new machines.

f)

Expert Solution

Explanation of Solution

True

It is riskier for firms to invest in research and development compared to new machines as the output generated is guaranteed in new machines. However, research and development outcome is suitable or not at current scenario and its development is questionable, therefore, it becomes risky.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

g)

To determine

To find: Whether private firms will engage in basic research or not.

g)

Expert Solution

Explanation of Solution

False

The decision to enter into research would also require the amount of money to be spent on component to translate into usable ideas for production. Thus, the feasibility of the research needs to be considered.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

h)

To determine

To find: Whether growth will come to an end or not.

h)

Expert Solution

Explanation of Solution

False

This statement does not have any adaptability or proof that growth will come to an end. Human being cannot predict the future. Hence, any statement without fact is false.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

i)

To determine

To find: Whether technology has played an important role in C’s economic growth or not.A

i)

Expert Solution

Explanation of Solution

False

The above statement is false as this is the only country in the world which produces and sells goods at relatively lower rate compared to other countries of the world. The level of technological progress and advancement has led this country to use human and natural resources efficiently.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 12, Problem 1QAP

a

To determine

To find: Whether the given statement is true or not.

a

Expert Solution

Explanation of Solution

Uncertain

Any change in input affects output but it depends on the stage of returns to scale of production. When there is increase in level of technology, it is not necessary that labor will be as effective as capital to affect output. There can be any possibility of impact on output due to change in inputs.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

b)

To determine

To find:

Whether capital per effective worker remains constant due to increase in rate of technological progress.

b)

Expert Solution

Explanation of Solution

True

To keep capital per effective worker constant, there is always a need for technological advancement. Firm must invest in their research and development department so that there is always a progress of technology. This is always to be done so that firms remains at steady state level of output.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

c)

To determine

To find:

Whether output per worker increases due to population growth.

c)

Expert Solution

Explanation of Solution

False

At steady state, output increases with the same rate as increase in population growth rate but output per effective worker remains constant. To remain at steady state, as population increases, output also increases so that economy remains at constant level.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

d)

To determine

To find:

Whether output per worker increases due to technological progress.

d)

Expert Solution

Explanation of Solution

True

At steady state level of output, capital per worker and out per worker remains constant. So, when there is progress in technology, that is capital, there is also a positive change in output per worker.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

e)

To determine

To find: Whether growth of output per effective worker increases due to higher saving rate.

e)

Expert Solution

Explanation of Solution

True

An increase in saving rate directly has a positive impact on capital stock and output level. A shift from lower steady state level of output to higher level of output increases leads to increase in the growth rate of output per worker, keeping population rate constant.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

f)

To determine

To find: Whether R& D spending is riskier than investing in new machines.

f)

Expert Solution

Explanation of Solution

True

It is riskier for firms to invest in research and development compared to new machines as the output generated is guaranteed in new machines. However, research and development outcome is suitable or not at current scenario and its development is questionable, therefore, it becomes risky.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

g)

To determine

To find: Whether private firms will engage in basic research or not.

g)

Expert Solution

Explanation of Solution

False

The decision to enter into research would also require the amount of money to be spent on component to translate into usable ideas for production. Thus, the feasibility of the research needs to be considered.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

h)

To determine

To find: Whether growth will come to an end or not.

h)

Expert Solution

Explanation of Solution

False

This statement does not have any adaptability or proof that growth will come to an end. Human being cannot predict the future. Hence, any statement without fact is false.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

i)

To determine

To find: Whether technology has played an important role in C’s economic growth or not.A

i)

Expert Solution

Explanation of Solution

False

The above statement is false as this is the only country in the world which produces and sells goods at relatively lower rate compared to other countries of the world. The level of technological progress and advancement has led this country to use human and natural resources efficiently.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 12, Problem 1QAP

a

To determine

To find: Whether the given statement is true or not.

a

Expert Solution

Explanation of Solution

Uncertain

Any change in input affects output but it depends on the stage of returns to scale of production. When there is increase in level of technology, it is not necessary that labor will be as effective as capital to affect output. There can be any possibility of impact on output due to change in inputs.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

b)

To determine

To find:

Whether capital per effective worker remains constant due to increase in rate of technological progress.

b)

Expert Solution

Explanation of Solution

True

To keep capital per effective worker constant, there is always a need for technological advancement. Firm must invest in their research and development department so that there is always a progress of technology. This is always to be done so that firms remains at steady state level of output.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

c)

To determine

To find:

Whether output per worker increases due to population growth.

c)

Expert Solution

Explanation of Solution

False

At steady state, output increases with the same rate as increase in population growth rate but output per effective worker remains constant. To remain at steady state, as population increases, output also increases so that economy remains at constant level.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

d)

To determine

To find:

Whether output per worker increases due to technological progress.

d)

Expert Solution

Explanation of Solution

True

At steady state level of output, capital per worker and out per worker remains constant. So, when there is progress in technology, that is capital, there is also a positive change in output per worker.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

e)

To determine

To find: Whether growth of output per effective worker increases due to higher saving rate.

e)

Expert Solution

Explanation of Solution

True

An increase in saving rate directly has a positive impact on capital stock and output level. A shift from lower steady state level of output to higher level of output increases leads to increase in the growth rate of output per worker, keeping population rate constant.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

f)

To determine

To find: Whether R& D spending is riskier than investing in new machines.

f)

Expert Solution

Explanation of Solution

True

It is riskier for firms to invest in research and development compared to new machines as the output generated is guaranteed in new machines. However, research and development outcome is suitable or not at current scenario and its development is questionable, therefore, it becomes risky.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

g)

To determine

To find: Whether private firms will engage in basic research or not.

g)

Expert Solution

Explanation of Solution

False

The decision to enter into research would also require the amount of money to be spent on component to translate into usable ideas for production. Thus, the feasibility of the research needs to be considered.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

h)

To determine

To find: Whether growth will come to an end or not.

h)

Expert Solution

Explanation of Solution

False

This statement does not have any adaptability or proof that growth will come to an end. Human being cannot predict the future. Hence, any statement without fact is false.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

i)

To determine

To find: Whether technology has played an important role in C’s economic growth or not.A

i)

Expert Solution

Explanation of Solution

False

The above statement is false as this is the only country in the world which produces and sells goods at relatively lower rate compared to other countries of the world. The level of technological progress and advancement has led this country to use human and natural resources efficiently.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 12, Problem 1QAP

a

To determine

To find: Whether the given statement is true or not.

a

Expert Solution

Explanation of Solution

Uncertain

Any change in input affects output but it depends on the stage of returns to scale of production. When there is increase in level of technology, it is not necessary that labor will be as effective as capital to affect output. There can be any possibility of impact on output due to change in inputs.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

b)

To determine

To find:

Whether capital per effective worker remains constant due to increase in rate of technological progress.

b)

Expert Solution

Explanation of Solution

True

To keep capital per effective worker constant, there is always a need for technological advancement. Firm must invest in their research and development department so that there is always a progress of technology. This is always to be done so that firms remains at steady state level of output.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

c)

To determine

To find:

Whether output per worker increases due to population growth.

c)

Expert Solution

Explanation of Solution

False

At steady state, output increases with the same rate as increase in population growth rate but output per effective worker remains constant. To remain at steady state, as population increases, output also increases so that economy remains at constant level.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

d)

To determine

To find:

Whether output per worker increases due to technological progress.

d)

Expert Solution

Explanation of Solution

True

At steady state level of output, capital per worker and out per worker remains constant. So, when there is progress in technology, that is capital, there is also a positive change in output per worker.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

e)

To determine

To find: Whether growth of output per effective worker increases due to higher saving rate.

e)

Expert Solution

Explanation of Solution

True

An increase in saving rate directly has a positive impact on capital stock and output level. A shift from lower steady state level of output to higher level of output increases leads to increase in the growth rate of output per worker, keeping population rate constant.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

f)

To determine

To find: Whether R& D spending is riskier than investing in new machines.

f)

Expert Solution

Explanation of Solution

True

It is riskier for firms to invest in research and development compared to new machines as the output generated is guaranteed in new machines. However, research and development outcome is suitable or not at current scenario and its development is questionable, therefore, it becomes risky.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

g)

To determine

To find: Whether private firms will engage in basic research or not.

g)

Expert Solution

Explanation of Solution

False

The decision to enter into research would also require the amount of money to be spent on component to translate into usable ideas for production. Thus, the feasibility of the research needs to be considered.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

h)

To determine

To find: Whether growth will come to an end or not.

h)

Expert Solution

Explanation of Solution

False

This statement does not have any adaptability or proof that growth will come to an end. Human being cannot predict the future. Hence, any statement without fact is false.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

i)

To determine

To find: Whether technology has played an important role in C’s economic growth or not.A

i)

Expert Solution

Explanation of Solution

False

The above statement is false as this is the only country in the world which produces and sells goods at relatively lower rate compared to other countries of the world. The level of technological progress and advancement has led this country to use human and natural resources efficiently.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 6

Chapter 12, Problem 1QAP

a

To determine

To find: Whether the given statement is true or not.

a

Expert Solution

Explanation of Solution

Uncertain

Any change in input affects output but it depends on the stage of returns to scale of production. When there is increase in level of technology, it is not necessary that labor will be as effective as capital to affect output. There can be any possibility of impact on output due to change in inputs.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 7

Chapter 12, Problem 1QAP

a

To determine

To find: Whether the given statement is true or not.

Answer 8

a

Expert Solution

Explanation of Solution

Uncertain

Any change in input affects output but it depends on the stage of returns to scale of production. When there is increase in level of technology, it is not necessary that labor will be as effective as capital to affect output. There can be any possibility of impact on output due to change in inputs.

Answer 9

a

Expert Solution

Answer 10

a

Expert Solution

Answer 11

Expert Solution

Answer 12

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 13

b)

To determine

To find:

Whether capital per effective worker remains constant due to increase in rate of technological progress.

b)

Expert Solution

Explanation of Solution

True

To keep capital per effective worker constant, there is always a need for technological advancement. Firm must invest in their research and development department so that there is always a progress of technology. This is always to be done so that firms remains at steady state level of output.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 14

b)

To determine

To find:

Whether capital per effective worker remains constant due to increase in rate of technological progress.

Answer 15

b)

Expert Solution

Explanation of Solution

True

To keep capital per effective worker constant, there is always a need for technological advancement. Firm must invest in their research and development department so that there is always a progress of technology. This is always to be done so that firms remains at steady state level of output.

Answer 16

b)

Expert Solution

Answer 17

b)

Expert Solution

Answer 18

Expert Solution

Answer 19

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 20

c)

To determine

To find:

Whether output per worker increases due to population growth.

c)

Expert Solution

Explanation of Solution

False

At steady state, output increases with the same rate as increase in population growth rate but output per effective worker remains constant. To remain at steady state, as population increases, output also increases so that economy remains at constant level.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 21

c)

To determine

To find:

Whether output per worker increases due to population growth.

Answer 22

c)

Expert Solution

Explanation of Solution

False

At steady state, output increases with the same rate as increase in population growth rate but output per effective worker remains constant. To remain at steady state, as population increases, output also increases so that economy remains at constant level.

Answer 23

c)

Expert Solution

Answer 24

c)

Expert Solution

Answer 25

Expert Solution

Answer 26

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 27

d)

To determine

To find:

Whether output per worker increases due to technological progress.

d)

Expert Solution

Explanation of Solution

True

At steady state level of output, capital per worker and out per worker remains constant. So, when there is progress in technology, that is capital, there is also a positive change in output per worker.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 28

d)

To determine

To find:

Whether output per worker increases due to technological progress.

Answer 29

d)

Expert Solution

Explanation of Solution

True

At steady state level of output, capital per worker and out per worker remains constant. So, when there is progress in technology, that is capital, there is also a positive change in output per worker.

Answer 30

d)

Expert Solution

Answer 31

d)

Expert Solution

Answer 32

Expert Solution

Answer 33

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 34

e)

To determine

To find: Whether growth of output per effective worker increases due to higher saving rate.

e)

Expert Solution

Explanation of Solution

True

An increase in saving rate directly has a positive impact on capital stock and output level. A shift from lower steady state level of output to higher level of output increases leads to increase in the growth rate of output per worker, keeping population rate constant.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 35

e)

To determine

To find: Whether growth of output per effective worker increases due to higher saving rate.

Answer 36

e)

Expert Solution

Explanation of Solution

True

An increase in saving rate directly has a positive impact on capital stock and output level. A shift from lower steady state level of output to higher level of output increases leads to increase in the growth rate of output per worker, keeping population rate constant.

Answer 37

e)

Expert Solution

Answer 38

e)

Expert Solution

Answer 39

Expert Solution

Answer 40

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 41

f)

To determine

To find: Whether R& D spending is riskier than investing in new machines.

f)

Expert Solution

Explanation of Solution

True

It is riskier for firms to invest in research and development compared to new machines as the output generated is guaranteed in new machines. However, research and development outcome is suitable or not at current scenario and its development is questionable, therefore, it becomes risky.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 42

f)

To determine

To find: Whether R& D spending is riskier than investing in new machines.

Answer 43

f)

Expert Solution

Explanation of Solution

True

It is riskier for firms to invest in research and development compared to new machines as the output generated is guaranteed in new machines. However, research and development outcome is suitable or not at current scenario and its development is questionable, therefore, it becomes risky.

Answer 44

f)

Expert Solution

Answer 45

f)

Expert Solution

Answer 46

Expert Solution

Answer 47

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 48

g)

To determine

To find: Whether private firms will engage in basic research or not.

g)

Expert Solution

Explanation of Solution

False

The decision to enter into research would also require the amount of money to be spent on component to translate into usable ideas for production. Thus, the feasibility of the research needs to be considered.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 49

g)

To determine

To find: Whether private firms will engage in basic research or not.

Answer 50

g)

Expert Solution

Explanation of Solution

False

The decision to enter into research would also require the amount of money to be spent on component to translate into usable ideas for production. Thus, the feasibility of the research needs to be considered.

Answer 51

g)

Expert Solution

Answer 52

g)

Expert Solution

Answer 53

Expert Solution

Answer 54

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 55

h)

To determine

To find: Whether growth will come to an end or not.

h)

Expert Solution

Explanation of Solution

False

This statement does not have any adaptability or proof that growth will come to an end. Human being cannot predict the future. Hence, any statement without fact is false.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 56

h)

To determine

To find: Whether growth will come to an end or not.

Answer 57

h)

Expert Solution

Explanation of Solution

False

This statement does not have any adaptability or proof that growth will come to an end. Human being cannot predict the future. Hence, any statement without fact is false.

Answer 58

h)

Expert Solution

Answer 59

h)

Expert Solution

Answer 60

Expert Solution

Answer 61

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 62

i)

To determine

To find: Whether technology has played an important role in C’s economic growth or not.A

i)

Expert Solution

Explanation of Solution

False

The above statement is false as this is the only country in the world which produces and sells goods at relatively lower rate compared to other countries of the world. The level of technological progress and advancement has led this country to use human and natural resources efficiently.

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.

Answer 63

i)

To determine

To find: Whether technology has played an important role in C’s economic growth or not.A

Answer 64

i)

Expert Solution

Explanation of Solution

False

The above statement is false as this is the only country in the world which produces and sells goods at relatively lower rate compared to other countries of the world. The level of technological progress and advancement has led this country to use human and natural resources efficiently.

Answer 65

i)

Expert Solution

Answer 66

i)

Expert Solution

Answer 67

Expert Solution

Answer 68

Economics Concept Introduction

Introduction:

Steady state in solow model is the situation in which capital is equal to depreciation. It means no new investment is done. All investment is used for repairing the existing depreciation.