You Are Asked to Make Comparisons of Two Pairs of Countries.The

question 65

Essay

You are asked to make comparisons of two pairs of countries.The first pair are the Latin American countries of Chile and Argentina;the second pair are France and Germany.You are given the following information: the average saving rate in Argentina is 13.4 percent,in Chile it is 21.3 percent,in France it is 22 percent,and in Germany,20.3 percent.Assuming the countries are identical in every other way,which country would the Solow model predict to have the higher per capita real GDP? However,you find out the steady state real per capita GDP in each of the 1.To the instructor,these are not actual steady states,but rather RPCGDP in 2007;these numbers are used for illustrative purposes only.countries is $16,500 in Argentina,$21,548 in Chile,$31,446 in France,and $33,181 in Germany.What is the primary factor which the simple Solow model uses to describe these differences? Give an example.

---

Definitions:

Income Earned

The compensation received by individuals for their participation in productive activities, typically through wages, salaries, or profits.

Henry George

A 19th-century economist known for his ideas on taxation, particularly the proposal that a single tax on land value could replace all other taxes, thereby improving economic equality and efficiency.

Rent

A regular payment made by a tenant to a landlord for the use of land, a building, or other property.

Landlords

Property owners who rent out land, residential, or commercial properties to tenants.