Econ 305 2015 PSet 4 Answers - ECONOMICS 305 Intermediate...

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ECONOMICS 305: Intermediate MacroeconomicsSpring 2015 ASSIGNMENT #4DUE DATE: Monday, November 30, noon. Question 1. Chapter 10 1) With what measure of macroeconomic activity do economists conventionally quantify the standard of living of a country? What is the interpretation of this measure, and why do economists like it?
2) According to the textbook, what are the three main conclusions that can be drawn from an analysis of growth rates for developed countries? Do they hold for all countries and if not, which counties deviate from it?
3) Describe four key properties of the neoclassical production function that Robert Solow and others have used to measure and model economic growth and that we discussed in class. Explain and interpret each of these properties of the production function in words. Depict a neoclassical production function in a (two-dimensional) graph, noting which features of your graph reflect which properties of the function.
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4) If output per capita grows by a constant 5% per year, then over three years by how much would the standard of living grow by?

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