Question
2) The Rule of 70 applies in any growth rate application. Lets say you have $1000 in savings and you have three alternatives for investing
2) The Rule of 70 applies in any growth rate application. Lets say you have $1000 in savings and you have three alternatives for investing these funds. a. A savings account earning 1% interest per year. b. A U.S. Treasury bond mutual fund earning 3% interest per year. c. A stock market mutual fund earning 8% interest per year. d. How long would it take to double your savings in each of these 3 accounts? 3) Modern economic theory points to three sources of economic growth. What are these three sources? Give an example of each. 4) Explain why a nation cannot continue to grow forever just by adding capital. 5) The Solow model focus on how resources affect output. This module/week, you focused on capital. a. Name the other two major categories of resources. b. Draw an aggregate production function with a typical shape; label this function F. (label all curves and axis). c. Draw a second production function that indicates a technological advancement; label this new function F1. (label all curves and axis).
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