Question Set 1

1. Briefly describe the basic assumptions of the Cobb-Douglas production function.
2. True or false: Growth accounting using the production function approach requires the assumption of perfectly competitive markets.
3. Which "explains" growth best? Capital accumulation or total factor productivity?
4. Should policymakers fixate on spurring "investment" as a source of economic growth?
   1. On the flip side, why is persistently low investment potentially a sign of bigger problems to come?
5. What is meant by growth accounting with production functions. What are key features?