Venezuela experienced a large outow of population. Choose one scenario for the subsequent Venezuelan economy that cannot be explained by Solow model. (a) Assume that productivity is constant. If those who subsequently leave return to Venezuela, then in the long run the amount of capital will return to what it was before the population outow. (b) According to the Solow model, the capital per worker should be above it's steady state. Assuming population and productivity are xed, thereafter, capital per worker will decline. (c) Assume that productivity is constant. The level of real GDP immediately after outows is lower than the original level because of the decline in population. (d) Assuming that the population remains unchanged permanently after the population outow, even in the short term, Venezuela's growth rate will be determined solely from the growth rate of productivity.
Venezuela experienced a large outow of population. Choose one scenario for the subsequent Venezuelan economy that cannot be explained by Solow model.
(a) Assume that productivity is constant. If those who subsequently leave return to Venezuela, then in the long run the amount of capital will return to what it was before the population outow.
(b) According to the Solow model, the capital per worker should be above it's steady state. Assuming population and productivity are xed, thereafter, capital per worker will decline.
(c) Assume that productivity is constant. The level of real
(d) Assuming that the population remains unchanged permanently after the population outow, even in the short term, Venezuela's growth rate will be determined solely from the growth rate of productivity.
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