What is meant by the ‘steady-state economic growth path’? What determines its slope?
Answer to relevant QuestionsWhat is the significance of the term ‘endogenous’ in endogenous growth theory? What, according to this theory, determines the long-run rate of economic growth?Why might market-orientated supply-side policies have undesirable side-effects on aggregate demand?What factors determine a country’s terms of trade?For what reasons might the exchange rate diverge from the purchasing-power parity rate over the longer term?Is the Eurozone an optimal currency area? Explain your answer.
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