he country of Swan is very wealthy, with a high level of per capita income and capital. The country of Solow is quite poor, with low levels of per capita income and capital. Both countries have the same production function, Y = Af(K, L), and both countries are described by the Solow–Swan growth model. The two countries will converge to the same level of per capita income only if: a. Swan and Solow are able to trade goods and services b. Swan donates a sufficient amount of its income to Solow c. the population growth rate and depreciation rate are the same d. the saving rate, the population growth rate and the depreciation rate are the same
he country of Swan is very wealthy, with a high level of per capita income and capital. The country of Solow is quite poor, with low levels of per capita income and capital. Both countries have the same production function, Y = Af(K, L), and both countries are described by the Solow–Swan growth model. The two countries will converge to the same level of per capita income only if: a. Swan and Solow are able to trade goods and services b. Swan donates a sufficient amount of its income to Solow c. the population growth rate and depreciation rate are the same d. the saving rate, the population growth rate and the depreciation rate are the same
Chapter30: Growth And Less Developed Countries
Section: Chapter Questions
Problem 20SQ
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The country of Swan is very wealthy, with a high level of per capita income and capital. The country of Solow is quite poor, with low levels of per capita income and capital. Both countries have the same production function, Y = Af(K, L), and both countries are described by the Solow–Swan growth model. The two countries will converge to the same level of per capita income only if:
a. Swan and Solow are able to trade goods and services
b. Swan donates a sufficient amount of its income to Solow
c. the population growth rate and
d. the saving rate, the population growth rate and the depreciation rate are the same
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