Assume we have a simple endogenous growth model where technology is labor augmenting, that is, Y = F(K,AN), and also proportional to the capital-labor ratio, such that y = ak.In this case, the growth rate of GDP per capita can be expressed by
A)sa + (n + d)
B)sa - (n + d)
C)sa - (n + d)k
D)sa + (n - d)k
E)sk - (n + d)a

Question

Quizplus · Accepted Answer

The growth rate of GDP per capita in an endogenous growth model where technology is labor augmenting and proportional to the capital-labor ratio is determined by the savings rate (s) times the productivity of capital (a) minus the sum of the population growth rate (n) and the depreciation rate (d). This is because the growth rate of GDP per capita is driven by the accumulation of effective capital (which grows at rate sa) and is reduced by factors that dilute capital per worker, namely population growth and depreciation.

Assume We Have a Simple Endogenous Growth Model Where Technology