Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Chapter 23, Problem 4TY
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Assume Mexico has the production possibilities to produce either 50 bottles of milk or 50 cartons of eggs using 100 worker hours. If Mexico decides to produce 30 bottles of milk, how many cartons of eggs can it produce?
Place the moveable point at the coordinate that shows this production possibility. Make sure that the point's coordinates are exactly correc
t.
Does the absolute PPP imply the relative PPP? What about the other way around?
Let’s think about two countries, Frugal and Smart. In Frugal, people devote 50% of GDP to making new investment goods, so ?=0.5, and their production function is ?=?‾‾√. In Smart, people devote 25% of GDP to making new investment goods, so ?=0.25 and their production function is ?=2?‾‾√. Both countries start off with ?=100.
a. What is the amount of investment in each country this year?
Frugal:
Smart:
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- what are 2 main factors of economic growth according to the PPFarrow_forward= 5√K and has a capital Country A produces GDP according to the following equation: GDP stock of 13,399. If the country devotes 13% of its GDP to producing or repairing investment goods, how much is this country currently investing? Rounds your answer to two decimal places.arrow_forwardAccording to economists, productivity can be increased by Group of answer choices - improving the education of workers - raising minimum wages - raising union wages - restricting trade with the foreign countriesarrow_forward
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- Country A produces GDP according to the following equation: GDP = 5√K or can be read as (5 square root of K), and has a capital stock of 10,000. If the country devotes 25% of its GDP to making investment goods, how much is this country investing? Additionally, if 1% of all capital goods depreciate every year, is the country’s GDP increasing, decreasing or remaining constant?arrow_forwardRuritania produces Widgets and Gizmos. If all of its factors of production are committed to making widgets exclusively, it can make 8 million units each year. If all of its factors are committed to making Gizmos exclusively, it can make 8 million units per year. Ruritania's Ministry of Growth has considered various plans to stimulate economic growth in the kingdom. Adjust the production possibilities frontier (PPF) on the graph to show the impact of a successful plan to improve the literacy rate. (Look at image)arrow_forwardThe majority of the countries have saving rates that are below the golden rule level. Why is it difficult for the countries to increase in saving rate higher to reach the golden rule level? (Explain in words)arrow_forward
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