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Question 2 (20 marks) a) Show graphically and explain the effect of a decrease in the...
Section B (LONG QUESTIONS): Answer any THREE (3) of the following four ques tions. Each question...
Section B (LONG QUESTIONS): Answer any THREE (3) of the following four ques tions. Each question is worth 25 marks for a total of 75 marks. B1. Solow (neoclassical) growth model: Consider the Solow (neoclassical) growth model seen in class where y denotes output per worker, k physical capital per worker, and A total factor productivity. Suppose that at any point in time the production function in per-worker terms is represented by where f(k) is increasing in k and there...
Using a graphical illustration of the standard Malthusian growth model, explain and show the short-run and...
Using a graphical illustration of the standard Malthusian growth model, explain and show the short-run and long-run effects of a one-time deadly disease killing a large fraction of the population? Would your answers be different if the disease becomes permanent? (Consider that the economy was initially at its steady-state prior the health shock and the disease has negligible effects on the birth rate)Using a graphical illustration of the standard Malthusian growth model, explain and show the short-run and long-run effects...
Question 2 130 marks] Suppose that the production function is given by Y 0.5VKv/N. Assume that...
Question 2 130 marks] Suppose that the production function is given by Y 0.5VKv/N. Assume that the size of the population, the labour participation rate and the unemployment rate are all constant. a) Does this production function exhibit constant returns to scale? Explain (5 marks) b) Explain the difference between returns to factors of production and returns to scale (4 marks) cTransform the production function into a relationship between output per worker and capital per worker. (5 marks) d) Assume...
Neoclassical Growth, and the Piggy Bank 1. What would be the effect of a rise in...
Neoclassical Growth, and the Piggy Bank 1. What would be the effect of a rise in the saving rate s on the steady state capital/labor ratio? 2. Draw a Solow diagram showing this effect. 3. What are the other effects of a change in the saving rate: growth rate, standard of living, interest rates and wage rates?
a). Empirical evidence suggests that poor countries do not have higher rates of return on capital. Explain why this evid...
a). Empirical evidence suggests that poor countries do not have higher rates of return on capital. Explain why this evidence is at odds with the Solow growth model. b).Using an appropriate diagram, explain the effect of an increase in the population growth rate on the steady-state income per person. Show and explain how the saving rate must change in order for a rise in the population growth rate to leave the steady-state unchanged. Explain your answer intuitively.
Under the assumptions of the Romer model show graphically and explain how a population increase affects...
Under the assumptions of the Romer model show graphically and explain how a population increase affects an economy’s long run growth rate.
1. An economy has the production function y = 20k1/2. The current capital stock is 256...
1. An economy has the production function y = 20k1/2. The current capital stock is 256 and the depreciation rate is 8 percent, and the population growth rate is 2 percent. For income per person to grow, the saving rate must exceed Question 1 options: 6 percent 8 percent 10 percent 12 percent Question 2 (1 point) 2. According to the Solow model, if an economy decreases its saving rate, then in the new steady state, compared to the old...
5. Calibrated Cobb-Douglas Growth Model Assume an economy has the following production function: Y = F(K,...
5. Calibrated Cobb-Douglas Growth Model Assume an economy has the following production function: Y = F(K, AL) = K 0.4 (AL)0.6. (a) Write down the production function per effective worker. (20 marks) (b) For this economy, the savings rate is 20%, the depreciation rate is 10% per year, the population growth rate is 2% per year, and the technology growth rate is 3% per year. Calculate the steady-state capital stock per effective worker, output per effective worker, and consumption per...
3. (Steady state in the Solow model) Consider two economies identical in everything except the production...
3. (Steady state in the Solow model) Consider two economies identical in everything except the production function. Economy 1 has a production function F(K, L)KoL1-a, economy 2 has a production function G(K, L)-aK(1-a)L. For both economies capital grows according to (1). a) Write output per worker as a function of capital per worker for both economies. b) Compute the steady state value of capital per worker for both these economies or, if it does not exist, show graphically that it...
Please the person who answered to this question before, do not answer again so that other...
Please the person who answered to this question before, do not
answer again so that other experts can answer it. I'm re-posting it
because it's wrong.
3. (Steady state in the Solow model) Consider two economies identical in everything except the production function. Economy 1 has a production function F(K, L)- KoL1-a, economy 2 has a production function G( K, L) = 0K + (1-0)L. For both economies capital grows according to (1). b) The steady state value of capital...
Section B (LONG QUESTIONS): Answer any THREE (3) of the following four ques tions. Each question is worth 25 marks for a total of 75 marks. B1. Solow (neoclassical) growth model: Consider the Solow (neoclassical) growth model seen in class where y denotes output per worker, k physical capital per worker, and A total factor productivity. Suppose that at any point in time the production function in per-worker terms is represented by where f(k) is increasing in k and there...
Question 2 130 marks] Suppose that the production function is given by Y 0.5VKv/N. Assume that the size of the population, the labour participation rate and the unemployment rate are all constant. a) Does this production function exhibit constant returns to scale? Explain (5 marks) b) Explain the difference between returns to factors of production and returns to scale (4 marks) cTransform the production function into a relationship between output per worker and capital per worker. (5 marks) d) Assume...
5. Calibrated Cobb-Douglas Growth Model Assume an economy has the following production function: Y = F(K, AL) = K 0.4 (AL)0.6. (a) Write down the production function per effective worker. (20 marks) (b) For this economy, the savings rate is 20%, the depreciation rate is 10% per year, the population growth rate is 2% per year, and the technology growth rate is 3% per year. Calculate the steady-state capital stock per effective worker, output per effective worker, and consumption per...
3. (Steady state in the Solow model) Consider two economies identical in everything except the production function. Economy 1 has a production function F(K, L)KoL1-a, economy 2 has a production function G(K, L)-aK(1-a)L. For both economies capital grows according to (1). a) Write output per worker as a function of capital per worker for both economies. b) Compute the steady state value of capital per worker for both these economies or, if it does not exist, show graphically that it...
Please the person who answered to this question before, do not
answer again so that other experts can answer it. I'm re-posting it
because it's wrong.
3. (Steady state in the Solow model) Consider two economies identical in everything except the production function. Economy 1 has a production function F(K, L)- KoL1-a, economy 2 has a production function G( K, L) = 0K + (1-0)L. For both economies capital grows according to (1). b) The steady state value of capital...
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