QUESTION 1 FIK) = UK Also this country has 800 units of capital. Assuming that the...
QUESTION 1 Let's assume that the country has the following production function Y depreciation rate of 4%, calculate the steady-state level of capital FIK) = UK Also this country has 800 units of capital. Assuming that the investment rate is 40%, and a a. 25 b. 100 0.80 d. 200 QUESTION 9 According to what we learned in class, why would long-term bonds have a higher interest rate then short term bonds? 1. A longer maturity for a bond provides...
Question 20: A country has a 2008 growth rate of 4.2% and a 2007 GDP of $8,222 (in billions). What was the GDP in 2008? Question 31: If a country's initial real GDP is $10,000 and its yearly growth rate of GDP is 3.5%, use the Rule of 70 to determine approximately how many years it would take for this economy to double its GDP. A) 24.5 years B) 7 years C) 4.5 years D) 20 years Question 38: Consider...
A country has the following production function: Yt=Kt^0.5Lt^0.5 Assume that 5 percent of of capital depreciates each year and the country saves 20 percent of output each year. What is the per worker production function, What is the steady-state level of capital per worker? What is the steady-state level of output per worker? The steady-state level of consumption per worker is: The steady-state level of saving per person is: The growth rate of output per person in the steady-state is:
a)Assume that country A has the following production function Y=K^0.3 L^0.7 Its saving rate is 20% per year. The depreciation rate is assumed to be 5% per year. What is the steady state level of capital stock per capital, K*?What is the steady state level of output per capital, Y*? What is the steady state level of c*? Show the results in a suitable diagram. b) At year 1,K=6. Is this a steady state? Find out the values of GDP...
1. Country A and country B both have the production function Y = F(K,L)= VKL. (5 Points) Does this production function have constant returns to scale? Explain. (5 Points) What is the per-worker production function, y=f(k)? (10 Points) Assume that neither country experiences population growth or technological progress and that 5 percent of capital depreciates each year. Assume further that country A saves 10 percent of output each year and country B saves 20 percent of output each year. Using...
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...
Problem 4
Consider a country with production function , where y =
5k1/2, where y is the output per worker and k is capital
per worker. Suppose the investment in capital occurs at a rate of
35% of income per worker every period, depreciation rate is 1.5%
and population growth rate is 2%. Use excel to plot the production
function, investment line and capital depletion line with k on the
x-axis(use the attached spread sheet to draw your graphs).
-attached...
1. lounchPad LounchPad . Country Country A and country B both have the production function Y = F(K, L) = K1/312/3 Does this production function have constant returns to scale? Explain. b. What is the per-worker production function, y = f(k)? c. Assume that neither country experiences population growth or technological progress and that 20 percent of capital depreciates each year. Assume further that country A saves 10 percent of output each year and country B saves 30 percent of...
WRITING MUST BE CLEAR TO READ!
3. Country A and country B both have the production function Y = F(K, L) = K^(1/3) L ^(2/3). 3a. Does this production function have constant returns to scale? Explain. 3b. What is the per-worker production function, y = f(k)? 3c. Assume that neither country experiences population growth or technological progress and that 20 percent of capital depreciates each year. Assume further that country A saves 10 percent of output each year and country...
1. Consider a country that is initially in steady state. Suppose the saving rate increases. Moreover, the population growth rate increases by 1% but the capital depreciation rate falls by 1%. According to the Solow–Swan model, the per capita capital stock increases, and the country moves to a new, higher steady state level of per capita income. Answer true, false, or uncertain. Please briefly explain your answer. 2. Consider the country of Solow, which is described by the Solow–Swan model....