Problem set 4 The steady-state per capita consumption is written as
Problem set 4
The steady-state per capita consumption is written as
c=Aka -(n+
)k
where c is the steady-state per capita consumption.
A: productivity
k: per capita capital stock
δ: capital depreciation rate
n: population growth rate
Question : Compute the Golden rule kGR that maximizes the steady-state per capita consumption level?
Homework Answers
1. Consider a country that is initially in steady state. Suppose the saving rate increases. Moreover,...
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....
Consider an economy in a steady state with population growth rate η, a rate of capital depreciati...
Consider an economy in a steady state with population growth rate η, a rate of capital depreciation δ , and a rate of technological progress g. a) At the steady state Δk = 0, where k equals capital per effective worker. What condition must be met for this to hold? Describe the condition in words as well as mathematical expressions. b) Describe in words what is maximized at the Golden Rule level of k. c) What mathematical condition must be...
Steady state question
The capital share of GDP is about 40 percent, the average growth in output is about2 percent per year, the depreciation rate is about 3 percent per year, and the capital–output ratiois about 1.5. Suppose that the production function is Cobb–Douglas andin a steady state.a. What must the saving rate be in the initial steady state? [Hint: Use the steady-staterelationship, sy = (δ + n + g)k.]b. What is the marginal product of capital in the initial steady state?c. Suppose...
everything but part a Problem Set 8 1. (Population growth but no technology growth) Consider an...
everything but part a
Problem Set 8 1. (Population growth but no technology growth) Consider an economy that is described by the production function Y = K L. Moreover the de preciation rate of capital is 8 = 0.05 and the population growth rate is n=0.05 (there is no technology growth) (a) What is the per-worker production function, that is y = ¥? What is the marginal product of capital, that is 8X? (b) If the saving rate is 8...
In the Solow growth model without population growth, if an economy has a steady-state value of...
In the Solow growth model without population growth, if an economy has a steady-state value of the marginal product of capital (MPK) of 0.125, a depreciation rate of 0.1, and a saving rate of 0.225, then the steady-state capital stock per worker: Select one: a. is less than the Golden Rule level. O b. is greater than the Golden Rule level. c. could be either above or below the Golden Rule level. d. equals the Golden Rule level.
1. Assume that an economy described by a Solow model has a per-worker production function given...
1. Assume that an economy described by a Solow model has a per-worker production function given by y- k05, where y is output per worker and k is capital stock per worker (capital-labor ratio). Assume also that the depreciation rate δ is 5%. This economy has no technological progress and no population growth (n 0). Both capital and labor are paid for their marginal products and the economy has been in a steady state with capital stock per worker at...
8. Per capita GDP in the long run: Suppose an economy begins in steady state. By...
8. Per capita GDP in the long run: Suppose an economy begins in steady state. By what proportion does per capita GDP change in the long run in response to each of the following changes? (a) The investment rate doubles. (b) The depreciation rate falls by 10%. (c) The productivity level rises by 10%. (d) An earthquake destroys 75% of the capital stock. (e) A more generous immigration policy leads the population to double.
Question 5. (4 points each) Consider the Solow model in Chapter 6. Production function is given...
Question 5. (4 points each) Consider the Solow model in Chapter 6. Production function is given by Y = A_KENZ The notations of variables are the same as the slides for Ch.6.The depreciation rate d is 0.1, the population growth rate n is 0.1, and the saving rate s is 0.2. The level of productivity is constant, so At = 2 all the time. (1) Compute the steady-state level of capital per person k*. (2) Compute the steady-state level of...
Please answer these questions (they are all connected): 4. Consider an economy in steady state that...
Please answer these questions (they are all connected):
4. Consider an economy in steady state that has population growth n04, technological growth at rate g-.02, and a depreciation rate δ-.04. The savings rate is s-40 and the production function is y-vk, what is the rate of growth of aggregate output Y in steady state? A.) 2 percent (.02) B.) 4 percent (.04) C.) 6 percent (.06) D.) 10 percent (.10) E.) None of the above or we aren't given enough...
all but part a 2. (Population growth and technology growth) Consider an economy that is described...
all but part a
2. (Population growth and technology growth) Consider an economy that is described by the production function Y depreciation rate of capital is 6 n 0.05 and the technology growth rate is g = 0.1 K (LE). Moreover the 0.15, the population growth rate is (a) What is the per effective worker production function, that is y ? What is the marginal product of capital, that is ? (b) If the saving rate is s 0.3, find...
everything but part a
Problem Set 8 1. (Population growth but no technology growth) Consider an economy that is described by the production function Y = K L. Moreover the de preciation rate of capital is 8 = 0.05 and the population growth rate is n=0.05 (there is no technology growth) (a) What is the per-worker production function, that is y = ¥? What is the marginal product of capital, that is 8X? (b) If the saving rate is 8...
In the Solow growth model without population growth, if an economy has a steady-state value of the marginal product of capital (MPK) of 0.125, a depreciation rate of 0.1, and a saving rate of 0.225, then the steady-state capital stock per worker: Select one: a. is less than the Golden Rule level. O b. is greater than the Golden Rule level. c. could be either above or below the Golden Rule level. d. equals the Golden Rule level.
1. Assume that an economy described by a Solow model has a per-worker production function given by y- k05, where y is output per worker and k is capital stock per worker (capital-labor ratio). Assume also that the depreciation rate δ is 5%. This economy has no technological progress and no population growth (n 0). Both capital and labor are paid for their marginal products and the economy has been in a steady state with capital stock per worker at...
8. Per capita GDP in the long run: Suppose an economy begins in steady state. By what proportion does per capita GDP change in the long run in response to each of the following changes? (a) The investment rate doubles. (b) The depreciation rate falls by 10%. (c) The productivity level rises by 10%. (d) An earthquake destroys 75% of the capital stock. (e) A more generous immigration policy leads the population to double.
Question 5. (4 points each) Consider the Solow model in Chapter 6. Production function is given by Y = A_KENZ The notations of variables are the same as the slides for Ch.6.The depreciation rate d is 0.1, the population growth rate n is 0.1, and the saving rate s is 0.2. The level of productivity is constant, so At = 2 all the time. (1) Compute the steady-state level of capital per person k*. (2) Compute the steady-state level of...
Please answer these questions (they are all connected):
4. Consider an economy in steady state that has population growth n04, technological growth at rate g-.02, and a depreciation rate δ-.04. The savings rate is s-40 and the production function is y-vk, what is the rate of growth of aggregate output Y in steady state? A.) 2 percent (.02) B.) 4 percent (.04) C.) 6 percent (.06) D.) 10 percent (.10) E.) None of the above or we aren't given enough...
all but part a
2. (Population growth and technology growth) Consider an economy that is described by the production function Y depreciation rate of capital is 6 n 0.05 and the technology growth rate is g = 0.1 K (LE). Moreover the 0.15, the population growth rate is (a) What is the per effective worker production function, that is y ? What is the marginal product of capital, that is ? (b) If the saving rate is s 0.3, find...
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