What three factors distinguish models of endogenous growth from their neoclassical counterparts?
What will be an ideal response?
There are increasing returns to capital investment (as opposed to decreasing), there are increasing returns to scale (as opposed to constant), and externality effects are included.
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A worker has a marginal product of 15 units a day, each of which can be sold for $10. Is it profitable to hire this worker if the wage rate is $100 a day? Briefly explain your answer
What will be an ideal response?
Investment spending is inversely related to the interest rate
a. True b. False
Anna gives Billy a gift of $200. We can be sure that Billy will
A) spend the $200 on what Anna hopes that he will spend it on. B) save the $200, and not spend it on anything. C) spend the $200 on whatever is next on Billy's list of things to buy. D) spend the $200 on something that Anna does not want him to spend it on.
Referring to Figure 18.2, the dollar is likely to appreciate if the exchange rate is either ________ or ________ pesos to the dollar.
A. 10; 11 B. 11; 12 C. 12; 13 D. 13; 14