Question

According to both the production model in Chapter 4 and the Solow model in Chapter 5, there must be large differences in productivity across countries. Why does productivity differ across countries? Select all that apply. (a) Countries use different technologies. (b) The amount of capital differs across countries. (c) The educational level of workers differs across countries. (d) The number of workers differs across countries. (e) The extent to which property rights are protected varies across countries.

Answer 1

Answer ; All Option are to be selected

Reasoning :

The production model is the basically can be considered as the initial step for the solow-swan model in which technological progress are given the focus for the poor countries to catch up the richer countries and this can happen mainly because of the proper production model.So, among the given option , the productivity differ across countries because of (A) i-e countries use different technologies as the main focus of the solow model the poor country can catch up the riche countries by alinging up with the technological advancement.So, depending upon the technologies used by countries , the productivity across countries differ and create the inequality in their progress.Option (b) Also is involved because educational level will encourage the worker to be innovative and find the best alternative for efficient productivity .Option (d) and option (e) are also applied because generally the no. of worker paly a main role in the production-labor market so the more worker means more productivity and also the property right will in the countries where there is more research and development and more use of technological advancement which solow swan model and production model focus .So all the above are correct answer .