Question 1

The people of Country X save 10 percent of their income, and the people of Country Y save 25 percent of their income. If these respective saving rates persist forever, will one country or the other enjoy a higher rate of income growth forever? Explain.

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Question 2

Consider the production function Y = 4FL,K,H,N). Suppose F10,8,6,5)= 100 and F30,24,18,15)=300. Does the production function have the property of constant returns to scale? Why or why not?

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Question 3

What are the long-run effects on productivity and income of an increase in the saving rate?

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Question 4

What is the distinction between foreign direct investment and foreign portfolio investment?

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Question 5

Figure 25-1 
-Refer to Figure 21-1. "When the amount of capital per worker increases by one unit, a poor country experiences a greater benefit than does a rich country." Does the figure illustrate this notion? Briefly explain.

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-Refer to Figure 21-1. "When...

Question 6

Brazil gives cash payments to its poor citizens on the condition that those citizens' children stay in school. In terms of the determinants of productivity, how might this public policy contribute to higher productivity in Brazil?

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Question 7

Figure 25-1 
-Refer to Figure 21-1. Does the figure represent the idea that the amount of capital per worker influences the amount of output per worker, or does the figure represent the idea that the amount of output per worker influences the amount of capital per worker?

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-Refer to Figure 21-1. Does...

Question 8

Studies have found that there is a relationship between height and productivity. Briefly explain.

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Question 9

Consider the production function Y=2FL,K,H,N). Suppose F12,10,9,7)=100 and F24,20,18,14)=180. Does the production function have the property of constant returns to scale? Why or why not?

Accepted Answer

The answer of Consider the production function Y=2FL,K,H,N). Suppose F12,10,9,7)=100...

Question 10

In the production function Y = AFL,K,H,N), Y represents the quantity of output; L represents the quantity of labor; K represents the quantity of physical capital; and N represents the quantity of natural resources. What does H represent?

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Question 11

Figure 25-1 
-Refer to Figure 21-1. In order for the figure to make sense, do we have to assume that capital is the only determinant of output? Briefly explain.

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The answer of Figure 25-1 
-Refer to Figure 21-1. In...

Question 12

If a production function has the property called , then doubling all inputs causes the amount of output to double as well.

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Question 13

Research suggests that taller workers tend to earn more income than shorter workers. What does this suggest about the relationship between workers' height and their productivity?

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Question 14

In what sense is capital accumulation costly to a society?

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Question 15

How does the phenomenon of diminishing returns to capital explain the catch-up effect?

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Question 16

What is the relationship between education and human capital?

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Question 17

Because of , an increase in the saving rate leads to higher growth of income and productivity only for a while.

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Question 18

Figure 25-1 
-Refer to Figure 21-1. In what way is the figure relevant to the catch-up effect?

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-Refer to Figure 21-1. In...

Question 19

In recent decades, economic growth has been much more rapid in South Korea than in the United States. What is the likely explanation for this fact?

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Question 20

In the production function Y = AFL,K,H,N), Y represents the quantity of output; L represents the quantity of labor; K represents the quantity of physical capital; and H represents the quantity of human capital. What does N represent?

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