题目
题目

FA25 ECON 302 002 Midterm 2

单项选择题

Consider two countries, labeled 1 and 2. Each has the production function 𝑌 𝑖 = 𝐴 ¯ 𝑖 𝐾 𝑖 𝛼 𝐿 𝑖 1 − 𝛼  , for i = 1, 2. Assume that the countries currently have the same GDP per person, 𝐿 1 = 𝐿 2 , common saving, population growth, and depreciation rates, and 𝐾 1 < 𝐾 2 . Based on this information you know that, in the long run, GDP per capita in country 1 ( 𝑦 1 ) is _______   𝑦 2 . Hint: Based on the information above, what do you know about 𝐴 1 relative to 𝐴 2 ?

选项
A.greater than
B.less than
C.equal to
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标准答案
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思路分析
To analyze which country will have higher GDP per capita in the long run, start by expressing GDP per capita in each country. - Each country has Yi = Âi Ki^α Li^(1−α). With Li equal across countries (L1 = L2) and per-capita GDP yi = Yi / Li, we get yi = Âi Ki^α Li^(−α) = Âi Ki^α / Li^α. Since Li is the same for both countries, the ratio of per-capita GDPs depends on Âi Ki^α. - We are given ......Login to view full explanation

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