Question

The Black Death in the fourteenth century decimated European populations by up to 50 percent. Consider a special case of the Romer model presented in class with ф-- -1 and assume that only workers were affected by the plague, but not researchers. Use this version of the Romer model to answer the following three questions. Question 39 Not yet graded /1 pts Briefly describe the effect of this occupation-specific calamity on short-run GDP Your Answer: Question 40 Not yet graded /1 pts Briefly describe the effect of this occupation-specific calamity on short-run GDP per capita. Your Answer: Question 41 Not yet graded /1 pts Briefly describe the effect of this occupation-specific calamity on the growth rate of knowledge At. Your Answer

39-41 are a connected question

Answer 1

Answer (39): Due to this occupation-specific calamity, the workers were severely affected by the plague and were not available for their support in the production process of various goods and commodities. This absence of laborers will lead to a huge downfall in the total production of goods, commodities and services in the economy, thereby in the short-run the GDP will experience a massive drop or fall in the GDP.

Answer (40): Since the Short run GDP will experience a massive fall, the short run GDP per-capita will also be much lesser than normal. This is because, in the calculation of the short run GDP per capita, all the individuals of a country will be taken in to calculation, irrespective of their contribution to the GDP. Therefore, the per unit or per capita GDP is bound to decrease.

Answer (41): The effect of this occupation-specific calamity on the growth rate of knowledge will be negative for the laborers or workers and there will be no impact on the growth of knowledge of the researchers. This is because, only the workers or laborers were affected by the plague, and therefore, their capability to enhance their knowledge will drastically reduce. Whereas, the researchers were not affected by the plague, and therefore, their research work continue a normal and they will enhance their knowledge growth.