Show the destruction of capital, Macroeconomics

Assignment Help:

Q. Show the Destruction of capital?

Destruction of capital, for instance, through a war, works in the opposite way. Marginal product of labor falls, GDP per capita falls and population decreases. This will again result in an increase in the marginal product of labor and GDP per capita return to the 'survival rate'.  

The core point of the model is that population growth would always eliminate the positive effects of technological development and GDP per capita will always return to survival level. This very ‘dismal' growth theory was prominent in the early 1800s and economics to this day is sometimes known as the ‘dismal science'.

Today we know that predictions of the model where incorrect. During rest of the 1800s Europe experienced a growth in GDP per capita. While the population growth was high, it was not nearly sufficient to eliminate the positive effects of technological development.


Related Discussions:- Show the destruction of capital

Describe the working of commercial banks, Q. Describe the working of Commer...

Q. Describe the working of Commercial banks? Fact that currency inside commercial banks isn't money may strike you as odd though it is an important principle. 100 dollar bill i

Joke among economists, There is a joke among economists that children are a...

There is a joke among economists that children are an "inferior good." In many countries there appears to be a negative relationship between income and the number children in a hou

Equilibrium and disequilibrium, Equilibrium and Disequilibrium  In phys...

Equilibrium and Disequilibrium  In physical sciences, equilibrium is a state of balance between opposing forces or actions. The meaning of equilibrium in economic theory is exa

Why do some countries have a low real per capita income, Why do some countr...

Why do some countries have a low real per capita income? Low real per capita income considers being largely due low productivity (i.e., output per worker) of low valued added

Single nonprofit provider, For a single nonprofit provider, describe an out...

For a single nonprofit provider, describe an output-maximizing model to predict supplier behavior?

Illustrate budget constraint and optimal bundle, Danny is an investment ban...

Danny is an investment banker and has income I = 300. When prices are px = 10 and py = 20, Danny consumes the bundle (x; y) = (6; 12). 1. Illustrate Danny's budget constraint

Elasticity, Suppose price elasticity of demand for HP laptops is -2.3. If t...

Suppose price elasticity of demand for HP laptops is -2.3. If the price of an HP laptop is $1,000, what should the new price be to have an increase of 10% in quantity demanded for

Macroeconomic Analysis, Derive the conditions for steady state in the Solow...

Derive the conditions for steady state in the Solow model. What are its implications? In what respects is the golden rule different from the steady state?

Trade cycle, policy measures to control trade cycle

policy measures to control trade cycle

Detetrmine gross investment and government expenditure, The following is th...

The following is the information from the national income accounts for a hypothetical country:  GNP                                                                  Rs. 5000.00

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd