The differences in the labour productivity of China, India, and the United States.

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Hey! I need help with the following question, which divides into fourmsub-questions, thank you in advance! Question: Two countries, Ruritania and Francia, have the same population, the same stock of physical capital, and the same human capital per worker in the year 2015. But Ruritania has a GDP per capita of $55,000 (in 2015 PPP), while Francia’s GDP per capita is $50,000 (again in 2015 PPP). What explains the 10 percent GDP per capita difference between the two countries? Ruritania goes on a public spending spree and builds new factories and infrastructure, increasing its physical capital stock by 20 percent between 2015 and 2020. In the meantime, the stock of physical capital in Francia and population and human capital per worker in either country remain constant. GDP per capita in Francia remains at $50,000 (in 2015 PPP), while Ruritania’s increases to $75,000 (also in 2015 PPP). What explains the 50 percent GDP per capita difference between the two countries in 2020?…

Answer 1

Question

Chapter 11, Problem 11.2RDE

(a):

To determine

The differences in the labour productivity of China, India, and the United States.

(b):

To determine

Changes in relative productivity of labors in China.

(c):

To determine

Changes in relative productivity of labors in U.S and India.

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Hey! I need help with the following question, which divides into fourmsub-questions, thank you in advance! Question: Two countries, Ruritania and Francia, have the same population, the same stock of physical capital, and the same human capital per worker in the year 2015. But Ruritania has a GDP per capita of $55,000 (in 2015 PPP), while Francia’s GDP per capita is $50,000 (again in 2015 PPP). What explains the 10 percent GDP per capita difference between the two countries? Ruritania goes on a public spending spree and builds new factories and infrastructure, increasing its physical capital stock by 20 percent between 2015 and 2020. In the meantime, the stock of physical capital in Francia and population and human capital per worker in either country remain constant. GDP per capita in Francia remains at $50,000 (in 2015 PPP), while Ruritania’s increases to $75,000 (also in 2015 PPP). What explains the 50 percent GDP per capita difference between the two countries in 2020?…

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