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7. Suppose a country's economy can be represented by the following Cobb-Douglas production function for per...
Consider an economy having a Cobb Douglas production function, where the share of capital income in...
Consider an economy having a Cobb Douglas production function,
where the share of capital income in total income is 1/2. The
depreciation rate is , population growth rate is n = 0.02
A. The golden rule level of capital per worker is .
B. The golden rule level of investment per worker is .
C. The golden rule level of output per worker is .
D. The golden rule savings rate is X% where X equals .
QUESTION 2 20...
Economic Growth II — Work It Out Question 1 An economy has a Cobb-Douglas production function:...
Economic Growth II — Work It Out Question 1 An economy has a Cobb-Douglas production function: Y = K (LE)-a The economy has a capital share of 0.25, a saving rate of 47 percent, a depreciation rate of 4.00 percent, a rate of population growth of 2.25 percent, and a rate of labor-augmenting technological change of 2.5 percent. It is in steady state. a. At what rates do total output and output per worker grow? Total output growth rate: %...
An economy has a Cobb-Douglas production function: Y = Ka(LE)(1-a). The economy has a capital share...
An economy has a Cobb-Douglas production function: Y = Ka(LE)(1-a). The economy has a capital share of a third (means a= 1/3), a saving rate of 24 percent, a depreciation rate of 3 percent, and a rate of labor-augmenting technological change of 1 percent. It is in steady state. a. At what rate does total output, output per worker, and output per effective worker grow? b. Solve for steady state capital per effective worker, output per effective worker, consumption per...
1) Consider an economy having a Cobb Douglas production function, where the share of capital income...
1) Consider an economy having a Cobb Douglas production
function, where the share of capital income in total income is 1/2.
The depreciation rate is
, population growth rate is n = 0.02
2) Assume a general savings rate
, depreciation rate
and a production per worker
, where 0< <1.
Suppose the savings rate increases. What happens to the golden rule
level of capital?
3) Consider an economy that is described by the production
function
. The depreciation rate...
Economic Growth II - Work It Out Question 1 An economy has a Cobb Douglas production...
Economic Growth II - Work It Out Question 1 An economy has a Cobb Douglas production function: Y = K (LE). The economy has a capital share of 0.20, a saving rate of 50 percent, a depreciation rate of 3.50 percent, a rate of population growth of 4.00 percent, and a rate of labor augmenting technological change of 2.5 percent. It is in steady state. a. At what rates do total output and output per worker grow? Total output growth...
2. Consider a Solow growth model with Cobb-Douglas production function Y Ko (AN)-a with constant savings...
2. Consider a Solow growth model with Cobb-Douglas production function Y Ko (AN)-a with constant savings rate s, depreciation rate d and no growth in productivity or labor (gA = gN = 0) (a) Suppose A = 1, a = 1/3, s = 0.2 and 5 = 0.1 (annual). Calculate the steady state capital per worker and steady state output per worker (b) Suppose that the real wage w and real return to capital r are equal to the marginal...
Athens is an agricultural economy with the following Cobb-Douglas production function that uses land (x) and...
Athens is an agricultural economy with the following Cobb-Douglas production function that uses land (x) and labor (L) as factor inputs to produce grain (V) as the real output. Y = 2x0.5 70.5 = 2/XVI Land stock is 25 units. Labor supply is 16 workers. Find real output per worker.
An economy (country A) has a Cobb-Douglas production function: Y = K0.4 (LE) 0.6 The economy...
An economy (country A) has a Cobb-Douglas production function: Y = K0.4 (LE) 0.6 The economy has a saving rate of 48 percent, a depreciation rate of 2 percent, a rate of population growth of 1 percent, and a rate of labor-augmenting technological change of 3 percent. Assume there is a second economy (country B) with everything identical to country A except for the rate of population growth, which is 2 percent. Answer questions 4 and 5 above for country...
An economy has a Cobb-Douglas production function: Y = K"(LE)!-a The economy has a capital share...
An economy has a Cobb-Douglas production function: Y = K"(LE)!-a The economy has a capital share of 0.25, a saving rate of 40 percent, a depreciation rate of 3.00 percent, a rate of population growth of 0.75 percent, and a rate of labor- augmenting technological change of 2.0 percent. It is in steady state. b. Solve for capital per effective worker (k*), output per effective worker (y*), and the marginal product of capital.
An economy (country A) has a Cobb-Douglas production function: Y = K0.4 (LE) 0.6 The economy...
An economy (country A) has a Cobb-Douglas production function: Y = K0.4 (LE) 0.6 The economy has a saving rate of 48 percent, a depreciation rate of 2 percent, a rate of population growth of 1 percent, and a rate of labor-augmenting technological change of 3 percent. Assume there is a second economy (country B) with everything identical to country A except for the rate of population growth, which is 2 percent. Assume there is a third economy (country C)...
Consider an economy having a Cobb Douglas production function,
where the share of capital income in total income is 1/2. The
depreciation rate is , population growth rate is n = 0.02
A. The golden rule level of capital per worker is .
B. The golden rule level of investment per worker is .
C. The golden rule level of output per worker is .
D. The golden rule savings rate is X% where X equals .
QUESTION 2 20...
Economic Growth II — Work It Out Question 1 An economy has a Cobb-Douglas production function: Y = K (LE)-a The economy has a capital share of 0.25, a saving rate of 47 percent, a depreciation rate of 4.00 percent, a rate of population growth of 2.25 percent, and a rate of labor-augmenting technological change of 2.5 percent. It is in steady state. a. At what rates do total output and output per worker grow? Total output growth rate: %...
1) Consider an economy having a Cobb Douglas production
function, where the share of capital income in total income is 1/2.
The depreciation rate is
, population growth rate is n = 0.02
2) Assume a general savings rate
, depreciation rate
and a production per worker
, where 0< <1.
Suppose the savings rate increases. What happens to the golden rule
level of capital?
3) Consider an economy that is described by the production
function
. The depreciation rate...
Economic Growth II - Work It Out Question 1 An economy has a Cobb Douglas production function: Y = K (LE). The economy has a capital share of 0.20, a saving rate of 50 percent, a depreciation rate of 3.50 percent, a rate of population growth of 4.00 percent, and a rate of labor augmenting technological change of 2.5 percent. It is in steady state. a. At what rates do total output and output per worker grow? Total output growth...
2. Consider a Solow growth model with Cobb-Douglas production function Y Ko (AN)-a with constant savings rate s, depreciation rate d and no growth in productivity or labor (gA = gN = 0) (a) Suppose A = 1, a = 1/3, s = 0.2 and 5 = 0.1 (annual). Calculate the steady state capital per worker and steady state output per worker (b) Suppose that the real wage w and real return to capital r are equal to the marginal...
Athens is an agricultural economy with the following Cobb-Douglas production function that uses land (x) and labor (L) as factor inputs to produce grain (V) as the real output. Y = 2x0.5 70.5 = 2/XVI Land stock is 25 units. Labor supply is 16 workers. Find real output per worker.
An economy has a Cobb-Douglas production function: Y = K"(LE)!-a The economy has a capital share of 0.25, a saving rate of 40 percent, a depreciation rate of 3.00 percent, a rate of population growth of 0.75 percent, and a rate of labor- augmenting technological change of 2.0 percent. It is in steady state. b. Solve for capital per effective worker (k*), output per effective worker (y*), and the marginal product of capital.
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