Capital goods. Refer to the figure below and assume that the values for points a, b, and c (the combined value of consumer goods and capital goods) are $20 billion, $40 billion, and $30 billion, respectively. Economic growth B D Optimal output combination Consumer goods Instructions: Enter your answers as a whole number. a. If the economy moves from point a to point b over a 5-year period, what must have been its annual rate of economic growth? percent b If inste

1. Many endogenous growth models feature so called scale effects: per capita growth rises when population growth rises. Some economists have criticized these models for this reason, since countries with faster population growth do not in general appear to also experience faster per capita income growth. Consider an economy that has access to a production technology Y = AKª L¹-a where Y is output, A is the level of technology, K is capital and L is the amount of labor in the economy. Capital evolves according to K = SY (thus, the depreciation rate 6 = 0). The population growth rate is n. (Throughout, gx, where x can be any of the variables in the model). i. Assume that technology is determined by A =BK What sort of endogenous growth model is this? Find gk in terms of the K, L, and other parameters of the model. ii. Write an expression for gy in terms of gk and g₁. What must be true for a balanced growth path to exist in this model? Solve for the balanced growth path value of gy and gy,…

A. Investment in "infrastructure" represents spending on:   O roads, bridges, canals, etc. O human capital (education) O government institutions O innovation to physical capital   B. Which of the following was not one of Thomas Malthus' assumptions regarding population and economic growth?    O Per-capita income would increase.  O The economy was agriculturally based  O The supply of land was fixed  O The population would continue to increase

Question 7 What is meant by economic growth and why is it one of the most important goals macroeconomists seek to achieve? In your explanation, show the relationship between production, consumption, and investment in periods of economic growth?