Chapter 21: Economic Growth - Revision Sheet
1. In the context of the Solow model, what happens when an economy reaches its steady state?
2. What is the primary driver of long-term economic growth according to the summary?
3. Why do poorer countries tend to grow faster than richer countries, according to the summary?
Technological progress — role?
Enables sustained long-term growth
Exponential growth — effect?
Causes persistent income disparities
Growth rate — formula?
- Y_t) / Y_t
Economic growth — definition?
Sustained increase in per capita GDP.
Solow model — role?
Explains short-term convergence, long-term tech growth.
Key growth determinants?
Capital (K), effective labor (H), technology (A).
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