Chapter 20: Q 17. (page 496)
What is an aggregate production function?
The aggregate production function is related to the total output and total amount of labor employed in the economy.
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An economy starts off with a GDP per capita of $5,000. How large will the GDP per capita be if it grows at an annual rate of 2% for 20 years? 2% for 40 years? 4% for 40 years? 6% for 40 years?
Describe some of the political and social tradeoffs that might occur when a less developed country adopts a strategy to promote labor force participation and economic growth via investment in girls’ education.
Why does productivity growth in high-income economies not slow down as it runs into diminishing returns from additional investments in physical capital and human capital? Does this show one area where the theory of diminishing returns fails to apply? Why or why not?
List some arguments for and against the likelihood
of convergence.
Explain the difference between property rights and contractual rights. Why do they matter to economic growth?
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