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How much revenue, as a share of GDP, would the inflation tax raise in the following episodes? Assume the growth rate of real GDP is 2% in these calculations.
Read the interview with Anna Schwartz, and explain what you think was the main contribution of this book.
How do the long-run model and the short-run model fit together? What is the purpose of each model?
When was the largest recession of the past 50 years, and what was the cumulative loss in output over the course of the slowdown?
What are some examples of changes in the economy that would cause the labor supply curve to shift? What might shift the labor demand curve?
What explains the general rise in the employment-population ratio in the United States? By how much did the ratio decline around the last recession?
For each economy, compute the growth rate of TFP. A European economy: gY/L = 0.03, gK/L = 0.03.
What is the production function; that is, the relation between Y and X? Why does the scale of the market - the number of copies the firm could sell - matter?
Explain how nonrivalry leads to increasing returns in the two key production functions of the Romer model.
Suppose a friend of yours decides to write a novel. How ideas and objects are involved in this process. What happens if the novel is sold at marginal cost?
What is nonrivalry, and how does it lead to increasing returns? In your answer, what role does the standard replication argument play?
By what proportion does consumption per person initially increase? What happens to consumption in the long run?
Draw a graph showing what happens to output in China over time. What happens to output per person in China in the long run?
What is the principle of transition dynamics? Why does the Solow model lead to this principle, and why is it useful?
What determines whether a curve shifts in the Solow diagram? Make a list of the parameters of the Solow model, and state whether a change in each parameter.
What is the solution of the Solow model for consumption per person in the steady state, c* =C* /L*? How does each parameter in the solution affect c*, and why?
What is the economic meaning of the vertical gap between the investment curve and the depreciation curve in the Solow diagram?
What is the mechanism in the Solow model that generates growth? Why is this an appealing mechanism? Why does it fail to deliver economic growth in the long run?
Read the article on institutions by Mancur Olson, cited in footnote 10. What does Olson mean by this statement?
Can you attach a number to your explanation? In the model, by how much would wages rise if a third of the population died from disease?
Draw a graph showing how output evolves over time. Explain what happens to economic growth over time.
Draw a graph showing how output evolves over time, and explain what happens to the level and growth rate of per capita GDP.
Explain what happens to the economy over time and in the long run. In particular, comment on what happens to the level and growth rate of per capita GDP.
Compute the balance in your retirement account when you will be 25, 30, 40, 50, and 65 years old assuming the average annual rate of return is 6%.
Ethiopia had a per capita income of $700, about $2 per day. Compute per capita income in Ethiopia for year 2050 assuming average annual growth is 1% per year.