Endogenous Growth Model Consider the endogenous growth model, where the future period quantity of human capital is a function of current human capital, which drives production and thus growth. (a) Find the growth rate of human capital and consumption. Be sure to show your work. (b) Use your answer from part (a), in addition to the fact that C = Y in equilibrium, to explain why the economy will grow indefinitely when b(1 – u) > 1. (c) The Canadian government subsidizes education for its citizens in an effort to increase the country's stock of human capital. What is the economic rationale for this policy?

The following table shows the GDP per capita of various countries forthe years 1960 and 2010 in PPP-adjusted 2005 dollars. The table alsocontains the implied growth rates, which show how much on average eachcountry needed to grow each year to reach the 2010 level of GDP per capitastarting from the 1960 level of GDP per capita. Use the table to answer thefollowing questions. 1. During 1960-2010, which countries were able to reduce the gap betweentheir GDP per capita and the U.S. GDP per capita?

How can we measure growth over the very long run? Te poorest countries in the world have a per capita income of about $600 today. We can reason-ably assume that it is nearly impossible to live on an income below half this level (below $300). Per capita income in the United States in 2015 was about$51,000. With this information in mind, consider the following questions.(a) For how long is it possible that per capita income in the United Stateshas been growing at an average annual rate of 2% per year?(b) Some economists have argued that growth rates are mismeasured. Forexample, it may be difcult to compare per capita income today with percapita income a century ago when so many of the goods we can buy todaywere not available at any price then. Suppose the true growth rate in thepast century was 3% per year rather than 2%. What would the level of percapita income in 1800 have been in this case? Is this answer plausible?

Consider the endogenous growth model with two sectors: manufacturing firms and research universities. Which of the following affect/s the steady-state growth rate of output in this model? (i) stock of knowledge (ii) fraction of labor force in universities (iii) saving rate O a. Only (ii) O b. Only (iii) O c. Only (i) O d. (i), (ii), and (iii)

While increasing outplut levels have been a benefit of economic growth, what have been some of the challenges associated with the phenomenon of economic growth?  Here consider the broad social and environmental implications that stem from economic growth. In your answer draw on relevant evidence and examples.

The following table shows the GDP per capita of various countries forthe years 1960 and 2010 in PPP-adjusted 2005 dollars. The table alsocontains the implied growth rates, which show how much on average eachcountry needed to grow each year to reach the 2010 level of GDP per capitastarting from the 1960 level of GDP per capita. Use the table to answer thefollowing questions. 1. Why have some countries reduced the gap between their incomes andthat of the United States and other countries failed to do so?

4. Assume an endogenous growth model with a production function that in per capita terms can be written as y = 0.8k. If the savings rate is s = 0.3, the rate of growth of population is n = 0.03, and the rate of depreciation is d = 0.1, how high is the rate of growth of output per capita? %3D A. 14% B. 17% C. 13% D. 11% E. There is not enough information to calculate it.

What is the best way to measure the rate of economics growth? a. By the annual percentage change in nominal GDP O b. By the annual percentage change in nominal GDP per capita O c. O d. By the annual percentage change in real GDP By the annual percentage change in real GNP per capita Oe. None of the above

8. Reinterpret the endogenous growth model in this chapter as follows. Suppose that there are two groups of people in a country, the low- skilled workers and the high-skilled workers. The low-skilled workers have less human cap- ital per person initially than do the high-skilled workers. In the economy as a whole, output is produced using efficiency units of labor, and total factor productivity is z, just as in the endogenous growth model in this chapter. Each individual in this economy accumulates human capital on their own, and each has one unit of time to split between human capital accu- mulation and work. However, now b = bn for the high-skilled, b un for the high-skilled, and u the low-skilled. In the United States, there has been an increase in the gap between the wages of high-skilled workers and low-skilled work- ers, that has occurred over the last 30 years or bị for the low-skilled, for so. Determine how this model can explain this observation, and discuss.

4. Assume our endogenous growth model with 0<1. Now assume that a more open immigration policy suddenly boosts the US population growth rate to a higher constant rate: n'. Graph the short and long-run effects of this in a graph of the growth rate in ideas over time.