We performed calculations in class to determine how important savings rates and

Question

We performed calculations in class to determine how important savings rates and population growth rates were for explaining cross-country income differences. What was the main conclusion from these calculations? a) Savings rates explained most of cross-country income differences, while population growth 2. b) Savings rates and population growth rates combined to explain most of cross-country c) Savings and population growth rates explained only a modest part of cross-country income d) Savings rates and population growth rates explained none of the cross-country income rates were unimportant. income differences. differences differences. Answer: 3. Suppose that a country raises its investment rate. According to the Harrod-Domar model, how does this affect its output per worker in the long run? a) It permanently raises the level but not the growth rate. b) It permanently raises the growth rate but not the level. c) It permanently raises both the level and the growth rate. d) It has only temporary, not permanent effects on level and the growth rate. Answer China's GDP grows at 10% per year. At this pace, about how long will it take for the Chinese GDP to double in size? a) 5 years. b) 7 years. c) 9 years. d) 10 years 4, Answer

Explanation / Answer

2 Savings and population growth rate combined explain only modest of cross country income difference.

3 It has only temporary ,not permanent effect on level and growth rate.

4 7 years ( By rule of seventy)

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