Question: Consider the standard Cobb-Douglas model presented in the lectures and the textbook. Poor countries have lower output and less capital than rich countries. But is
Consider the standard Cobb-Douglas model presented in the lectures and the textbook. Poor countries have lower output and less capital than rich countries. But is the ratio of capital to output (?/?) higher or lower in poor countries? Why?According to the results from the textbook, how will changes to the following variables affect the steady-state value of income per person? When the level of technology rises, income per person rises When the importance of capital for production rises, income per person rises When depreciation rises, income per person rises When the unemployment rate rises, income per person rises
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