Economics Homework Help

Video #1

1. Be able to identify the main inputs to economic output.

2. Understand the concept of diminishing marginal product of capital

3. Understand how diminishing marginal product of capital implies that poor countries (those with less capital will catch up).

4. Identify the steady state and explain why output grows when savings is above depreciation and declines when depreciation is above savings.

Video #2:

5. Understand what happens when a savings rate is higher to the steady state?

6. Understand what happens when productivity increases to the steady state?

7. Understand what influence population growth has on the steady state?

Video #3

8. Understand how the data presented David Weil’s book on education, savings and population growth are consistent with the Solow model.

9. Understand how α (alpha) influences the effect of differences in savings rates on income ratios between countries. Also understand where the term alpha comes from using the assumptions from the model.

10. Understand how capital flows counter some of the conclusions from the model.

Video #4

11. Explain how productivity influences the steady state in the Solow model.

12. In the example on India understand how bad governance influences lack of GDP per capita growth