Podcast
Questions and Answers
What is the relationship between financial openness and GDP per capita according to the text?
What is the relationship between financial openness and GDP per capita according to the text?
- GDP per capita increases when the interest rate is higher than the rate of return on capital.
- GDP per capita decreases when the capital stock per capita is higher.
- GDP per capita decreases when the interest rate is lower than the rate of return on capital. (correct)
- GDP per capita increases when the capital stock per capita is lower.
How does financial openness affect the convergence process in an economy?
How does financial openness affect the convergence process in an economy?
- It has no effect on the convergence process.
- It halts the convergence process by decreasing capital outflows.
- It slows down the convergence process by decreasing capital inflows.
- It accelerates the convergence process by increasing capital inflows. (correct)
Why do countries with higher productivity growth receive more capital inflows according to the text?
Why do countries with higher productivity growth receive more capital inflows according to the text?
- They borrow more from abroad to invest in lower productivity sectors.
- Their increased productivity leads to a higher return on investment, attracting more capital inflows. (correct)
- Higher productivity reduces the need for capital inflows due to self-sufficiency.
- Higher productivity increases savings rates, attracting more capital inflows.
What happens to a country's capital stock per capita when it borrows from abroad?
What happens to a country's capital stock per capita when it borrows from abroad?
In an open economy, how does an increase in savings rate affect GDP per capita?
In an open economy, how does an increase in savings rate affect GDP per capita?
Why do countries with higher productivity growth lend to abroad rather than borrow according to the text?
Why do countries with higher productivity growth lend to abroad rather than borrow according to the text?
In a closed economy, what happens to the capital stock per capita (kc) when savings (s) is low?
In a closed economy, what happens to the capital stock per capita (kc) when savings (s) is low?
What is the relationship between the capital stock per capita (k) and the return on capital (MPK) in a closed economy?
What is the relationship between the capital stock per capita (k) and the return on capital (MPK) in a closed economy?
In an open economy with access to world capital markets, what determines the capital stock per capita (kc) for a country?
In an open economy with access to world capital markets, what determines the capital stock per capita (kc) for a country?
How does access to world capital markets affect a country's GDP per capita?
How does access to world capital markets affect a country's GDP per capita?
What is the relationship between the capital supply curve (KS) and the capital demand curve (KD) in a closed economy?
What is the relationship between the capital supply curve (KS) and the capital demand curve (KD) in a closed economy?
What is the condition for capital market equilibrium in a closed economy?
What is the condition for capital market equilibrium in a closed economy?
According to the given information, what determines the output per capita in an open economy?
According to the given information, what determines the output per capita in an open economy?
In an open economy with access to world capital markets, what is the shape of the capital supply (KS) curve in the (k, r) space?
In an open economy with access to world capital markets, what is the shape of the capital supply (KS) curve in the (k, r) space?
If the initial capital stock per capita (k0) is less than the steady-state level (k*) in an open economy, what is the impact of financial openness on capital convergence?
If the initial capital stock per capita (k0) is less than the steady-state level (k*) in an open economy, what is the impact of financial openness on capital convergence?
According to the information provided, what is the relationship between the capital stock per capita (k) and the world interest rate (r*) in an open economy?
According to the information provided, what is the relationship between the capital stock per capita (k) and the world interest rate (r*) in an open economy?
If the initial capital stock per capita (k0) is greater than the steady-state level (k*) in an open economy, what is the expected capital flow direction?
If the initial capital stock per capita (k0) is greater than the steady-state level (k*) in an open economy, what is the expected capital flow direction?
What is the impact of financial openness on the production function and the diminishing returns to capital in an open economy?
What is the impact of financial openness on the production function and the diminishing returns to capital in an open economy?
