What is convergence hypothesis? Why should we expect convergence in the long run?
What will be an ideal response?
The convergence hypothesis holds that nations with low levels of productivity tend to have high productivity growth rates, so that international productivity differences shrink over time. In some poor countries, the supply of capital may be growing very rapidly. In others, educational attainment may be rising quickly, albeit from a low base. But the main reason to expect convergence in the long run is that low-productivity countries should be able to learn from high-productivity countries as scientific and managerial know-how spreads around the world.
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The simple circular flow model shows that workers and capital-owners offer their services to firms through the
A. product markets. B. government agencies. C. employment agencies. D. resource markets.
Which of the following statements is NOT true about using per capita real GDP to measure a nation's economic growth?
A) The definition does not indicate how the increase in growth is being disturbed among the nation's population. B) The definition assumes that some of the increase in productivity goes to the poor. C) The definition is not perfect for measuring increases in a nation's productive capacity. D) The definition has understated actual economic growth because it does not take into consideration changes in leisure.
Why is it that pure monopoly would not likely exist without government?
What will be an ideal response?
The most volatile part of wealth is:
a. transfer payments b. bonds c. the stockmarket d. savings accounts