Homework Answers
here gY=growth rate of
output,gK=growth rate of capital,gL=growth rate of labor,gA=growth
rate of the technology
gy=growth rate of output per worker, gk=growth rate of capital per worker
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Let Y, A, Kit Ly 34 a) solve for the growth rate of output along a...
Solow-Romer Model 2. Let the production function for output be 11/2 YA,K/2L2 Compared to the model...
Solow-Romer Model 2. Let the production function for output be 11/2 YA,K/2L2 Compared to the model described in the Chapter 6 Appendix, the exponent on capital has been increased from 1/3 to 1/2 above and decreased on labor from 2/3 to 1/2 to preserve constant returns to scale in objects. All of the other assumptions from lecture and/or from the Chapter 6 Appendix are the same What is the growth rate of output per worker along a balanced growth path?...
Problem 3 Discuss the effects of an increase in the saving rate and population growth on...
Problem 3 Discuss the effects of an increase in the saving rate and population growth on per capita output and the growth rate of per capita output in the long run. Problem 4 Consider an economy with technical growth on a balanced growth path. Now suppose that the saving rate increased because of a poliey change. Analyze transitional dynamics in terms of the Solow diagram. Problem 5 Investigate how the real rental price of capital r and the real wage...
3 Growth Model Suppose that output (Y) in an economy is given by the following aggregate...
3 Growth Model Suppose that output (Y) in an economy is given by the following aggregate production function: Y = K + NE where Kt is capital and Nt is the population. Furthermore, assume that capital depreciates at rate 8 and that savings is a constant proportion s of income. You may assume that 8 > S. 1. Suppose that the population remains constant. Solve for the steady-state level of capital per worker. 2. Now suppose that the population grows...
Consider the Solow growth model with depreciation rate and population growth rate n. The equation of...
Consider the Solow growth model with depreciation rate and population growth rate n. The equation of motion for the capital stock and the per worker production function in this economy are given by: Ak= s(f(k) - (8 + n) k y= f(k) = k1/4 a). Suppose adoption of modern birth control methods in a developing country causes the population growth rate to decrease. What happens in the main Solow diagram: what curve(s) shin, what happens to the steady- state level...
If the population of a nation expands at a faster rate than its rate of growth...
If the population of a nation expands at a faster rate than its rate of growth of real output, then O real output per capita would decrease O real output per capita would increase O there will be an upward movement along the production possibilities curve of the nation O there will be a downward movement along the production possibilities curve of the nation o the production possibilities curve of the nation will shift inward
2. Consider an economy which has the production function Y = AK03L07 The growth rate of...
2. Consider an economy which has the production function Y = AK03L07 The growth rate of the population is 0.01, the growth rate of productivity is 0.02, the capital depreciation rate is 0.06, and the saving rate is 0.24. In 2019, capital is 1500.0, labor is 10.0, and productivity is 15.0. In a yearly Solow growth model that allows for population and productivity growth), (a) What is the growth rate of output in the long run? (b) What is the...
suppose that the growth rate of output per worker is 2% and that the growth rate...
suppose that the growth rate of output per worker is 2% and
that the growth rate of capital per worker is 1% calculate the
growth rate of total factor productivity assuming a production
function of Y
4. (20 points) Suppose that the growth rate of output per worker is 2% and that the growth rate of capital per worker is 1%. Calculate the growth rate of total factor productivity assuming a production tu of Y = AK -9, with a...
According to the Solow model, the variable that determines the steady state growth rate of output...
According to the Solow model, the variable that determines the steady state growth rate of output per worker (Y/N) is A) the savings rate B) the population growth rate the growth rate of effectiveness of labor D) the level of government expenditure
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....
15. Consider an economy, with a production function given by Y-AK03L07. This economy's annual GDP growth...
15. Consider an economy, with a production function given by Y-AK03L07. This economy's annual GDP growth rate is 5%. Also assume that L and Kare both growing at annual rates of 2%. Calculate the growth rate of total factor productivity for this economy. a. 2.0% b. 3.0% 4.0% c. d. 5.0% 16. Suppose output is determined by a Cobb-Douglas production function Y=AK L1 Where 0ca<1. If total factor productivity (A) remains constant, but labour (L) and capital (K) inputs both...
Solow-Romer Model 2. Let the production function for output be 11/2 YA,K/2L2 Compared to the model described in the Chapter 6 Appendix, the exponent on capital has been increased from 1/3 to 1/2 above and decreased on labor from 2/3 to 1/2 to preserve constant returns to scale in objects. All of the other assumptions from lecture and/or from the Chapter 6 Appendix are the same What is the growth rate of output per worker along a balanced growth path?...
Problem 3 Discuss the effects of an increase in the saving rate and population growth on per capita output and the growth rate of per capita output in the long run. Problem 4 Consider an economy with technical growth on a balanced growth path. Now suppose that the saving rate increased because of a poliey change. Analyze transitional dynamics in terms of the Solow diagram. Problem 5 Investigate how the real rental price of capital r and the real wage...
3 Growth Model Suppose that output (Y) in an economy is given by the following aggregate production function: Y = K + NE where Kt is capital and Nt is the population. Furthermore, assume that capital depreciates at rate 8 and that savings is a constant proportion s of income. You may assume that 8 > S. 1. Suppose that the population remains constant. Solve for the steady-state level of capital per worker. 2. Now suppose that the population grows...
Consider the Solow growth model with depreciation rate and population growth rate n. The equation of motion for the capital stock and the per worker production function in this economy are given by: Ak= s(f(k) - (8 + n) k y= f(k) = k1/4 a). Suppose adoption of modern birth control methods in a developing country causes the population growth rate to decrease. What happens in the main Solow diagram: what curve(s) shin, what happens to the steady- state level...
If the population of a nation expands at a faster rate than its rate of growth of real output, then O real output per capita would decrease O real output per capita would increase O there will be an upward movement along the production possibilities curve of the nation O there will be a downward movement along the production possibilities curve of the nation o the production possibilities curve of the nation will shift inward
2. Consider an economy which has the production function Y = AK03L07 The growth rate of the population is 0.01, the growth rate of productivity is 0.02, the capital depreciation rate is 0.06, and the saving rate is 0.24. In 2019, capital is 1500.0, labor is 10.0, and productivity is 15.0. In a yearly Solow growth model that allows for population and productivity growth), (a) What is the growth rate of output in the long run? (b) What is the...
suppose that the growth rate of output per worker is 2% and
that the growth rate of capital per worker is 1% calculate the
growth rate of total factor productivity assuming a production
function of Y
4. (20 points) Suppose that the growth rate of output per worker is 2% and that the growth rate of capital per worker is 1%. Calculate the growth rate of total factor productivity assuming a production tu of Y = AK -9, with a...
According to the Solow model, the variable that determines the steady state growth rate of output per worker (Y/N) is A) the savings rate B) the population growth rate the growth rate of effectiveness of labor D) the level of government expenditure
15. Consider an economy, with a production function given by Y-AK03L07. This economy's annual GDP growth rate is 5%. Also assume that L and Kare both growing at annual rates of 2%. Calculate the growth rate of total factor productivity for this economy. a. 2.0% b. 3.0% 4.0% c. d. 5.0% 16. Suppose output is determined by a Cobb-Douglas production function Y=AK L1 Where 0ca<1. If total factor productivity (A) remains constant, but labour (L) and capital (K) inputs both...
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