Question 1

An island nation is in a steady state.A major hurricane passes over the nation and destroys half of the capital stock.What happens to gross domestic product (GDP),investment,and net investment in the short run and the long run? Explain.

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Question 2

Three countries have different levels of gross domestic product (GDP)per capita and different growth rates of GDP per capita,as identified in the table.
  Suppose the annual growth rates listed in the table remain the same in the upcoming years.Making reference to the rule of 70,would one expect the levels of GDP per capita in these three countries to converge? Why might the three countries have such different growth rates?

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Question 3

What is the primary reason why income levels have not converged among the countries of the world?

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Question 4

Identify four institutions that are important for economic growth.Why is each of these institutions necessary?

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Question 5

As a country develops more efficient institutions,what happens to its production function? Explain.

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Question 6

According to the Solow growth model,how is international financial aid expected to impact the poor countries that receive the aid? In many cases,did the provision of international financial aid have the desired impact? Explain.

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Quiz 25: Growth Theory

An island nation is in a steady state.A major hurricane passes over the nation and destroys half of the capital stock.What happens to gross domestic product (GDP),investment,and net investment in the short run and the long run? Explain.

What is the primary reason why income levels have not converged among the countries of the world?

Identify four institutions that are important for economic growth.Why is each of these institutions necessary?

As a country develops more efficient institutions,what happens to its production function? Explain.

According to the Solow growth model,how is international financial aid expected to impact the poor countries that receive the aid? In many cases,did the provision of international financial aid have the desired impact? Explain.