Suppose that there are two countries, X and Y, which differ in both their rates of investment and their population growth rates. In Country X, investment is 25% of GDP and the population grows at 0% per year. In Country Y, investment is 5% of GDP, and the population grows at 5% per year. The two countries have the same levels of productivity, A. In both countries, the rate of depreciation, 8, is 10%.

Suppose that there are two countries, X and Y, which differ in both their rates of investment and their population growth rates. In Country X, investment is 25% of GDP and the population grows at 0% per year. In Country Y, investment is 5% of GDP, and the population grows at 5% per year. The two countries have the same levels of productivity, A. In both countries, the rate of depreciation, 8, is 10%.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter20: Economic Growth

Section: Chapter Questions

Problem 12SCQ: Why dues productivity growth in high-income economies not slow down as it runs into diminishing...

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