If the initial level of labor input doubles, steady state capital stock k doubles. 

a)How does this result depend on constant returns to scale in the production function? 

b) does population growth n>0, lead to growth of output in the long run? does it lead to growth of output per worker in the long run? 

c) what is the meaning of the term convergence? how does absolute convergence differ from conditional convergence ? 

d) For 112 countries, the growth rate of real per capita GDP from 1960 to 2000 bears little relation to the level of real GDP in 1960. Does this finding conflict with the Solow model of economic growth? How does this question relate to the concept of conditional convergence ? 

E) Variations in the saving rate suppose that the saving rate, s, can vary as an economy develops. The equation for the growth rate of capital per worker K, is given by change k/k= s*(y/k)-sq-n. Is this equation still valid when S is not constant ? 

2. suppose that S rises as an economy develops; that is rich countries save at higher rate than poor countries. How does this behavior affect the results about convergence?

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Answer a If the production function has constant returns to scale real GDP will rise when labor inpu... View the full answer