Homework Answers
a) Golden Rule level of capital is where the marginal productivity of capital equals the depreciation rate.
MPK = Dep. Rate (L is assumed constant)
1/3 * k^-2/3 * L^2/3 = 0.03
k = L/(0.09)^3/2
b) Savings rate needed to achieve Golden Rule level of capital is s
s = Marginal productivity of capital/ Average Producitivity of Capital = 1/3(k)^-2/3*(L)^2/3 / (K^1/3*L^2/3)/K)
= 1/3= 0.33
Savings rate needed is 33.33%,
Add Answer to:
5. (25 points) Consider an economy described by the production function: Y - F(K, L) K//3,...
Consider an economy described by the production function: Y = F(K, L) = (0.25 0.75 a....
Consider an economy described by the production function: Y = F(K, L) = (0.25 0.75 a. What is the per-worker production function? y= b. Assuming no population growth or technological progress, find the steady-state capital stock per worker (k*), output per worker (y*), and consumption per worker (c*) as a function of the saving rate and the depreciation rate. k* = y* =
Consider an economy described by the following production function: Y=K0.2L0.8 Suppose the depreciation rate is 10%....
Consider an economy described by the following production function: Y=K0.2L0.8 Suppose the depreciation rate is 10%. Explain what the golden rule level of capital is. For this economy, calculate the golden rule level of capital per worker, output per worker, depreciation per worker and consumption per worker. Plot the results obtained in (b) above. Calculate the saving rate that would give the golden rule level. Explain what happens to the consumption level if the saving rate departs from the one...
1) Assume that a country's production function is Y = AK 0.3 L 0.7 (and MPK...
1) Assume that a country's production function is Y = AK 0.3 L 0.7 (and MPK = 0.3 Y/K ) The ratio of capital to output is 3, the growth rate of output is 3 percent, and the depreciation rate is 4 percent. Assume the economy is in a steady state. a.Write down the steady state condition and calculate the saving rate for this steady state. b.Write down the Golden Rule for this economy. Is this economy in the Golden...
1. Country A and country B both have the production function Y = F(K,L)= VKL. (5...
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...
2. The production function of an economy is y = 2-kas, where y is output per...
2. The production function of an economy is y = 2-kas, where y is output per labor and k is capital per labor. The growth rate of the labor force is 2% and the rate of capital depreciation is 5%. There is no Calculate the steady state capital-labor ratio (k*) if the saving rate is 10%! (3 points) What is the saving rate corresponding to the 'golden rule' growth path? (3 points) technological change a) b) c) Calculate the growth...
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...
3)- Consider an economy with the production function: Y=4K0.6 No.4, in the framework of the Solow...
3)- Consider an economy with the production function: Y=4K0.6 No.4, in the framework of the Solow Model, with usual definitions. Suppose, the labor force is growing at 1% a year, depreciation rate is 4%, and saving rate is 20%. (Total 17 points) a)- Find the steady state equilibrium of per worker levels of capital, output, and consumption. (4) b)- Find the golden rule saving rate, and golden rule per worker levels of output, capital, and consumption. (4) c)- How much...
4. (a) Consider an economy with production function Y-F(K.L)-VK -depreciation of capital=16% -saving rate-24% L population...
4. (a) Consider an economy with production function Y-F(K.L)-VK -depreciation of capital=16% -saving rate-24% L population growth-2% (i) if K-196 and L-100 in the cuIrent period. find ^ + and periods. 11) Find the steady state levels of-.-.and-. in the current and the next (b) Find the answers in (a) if the saving rate is changed to 30%. (c) Find the answers in (a) if the production function is changed to Y-F(K.L)-1.08-VKL
1) Consider an economy with the following the production function: Y = F(K,L) = K^0.4L^0.6 a)...
1) Consider an economy with the following the production function: Y = F(K,L) = K^0.4L^0.6 a) Find output per worker b) Find the marginal product of capital c) Find the steady state level of capital per worker given a savings rate of 0.1, the depreciation rate of 0.2, and population growth of 0.05 d) Show graphically or analytically what will happen if there is a decrease in the rate of depreciation. What effect does this have on steady-state levels of...
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...
Consider an economy described by the production function: Y = F(K, L) = (0.25 0.75 a. What is the per-worker production function? y= b. Assuming no population growth or technological progress, find the steady-state capital stock per worker (k*), output per worker (y*), and consumption per worker (c*) as a function of the saving rate and the depreciation rate. k* = y* =
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...
2. The production function of an economy is y = 2-kas, where y is output per labor and k is capital per labor. The growth rate of the labor force is 2% and the rate of capital depreciation is 5%. There is no Calculate the steady state capital-labor ratio (k*) if the saving rate is 10%! (3 points) What is the saving rate corresponding to the 'golden rule' growth path? (3 points) technological change a) b) c) Calculate the growth...
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...
3)- Consider an economy with the production function: Y=4K0.6 No.4, in the framework of the Solow Model, with usual definitions. Suppose, the labor force is growing at 1% a year, depreciation rate is 4%, and saving rate is 20%. (Total 17 points) a)- Find the steady state equilibrium of per worker levels of capital, output, and consumption. (4) b)- Find the golden rule saving rate, and golden rule per worker levels of output, capital, and consumption. (4) c)- How much...
4. (a) Consider an economy with production function Y-F(K.L)-VK -depreciation of capital=16% -saving rate-24% L population growth-2% (i) if K-196 and L-100 in the cuIrent period. find ^ + and periods. 11) Find the steady state levels of-.-.and-. in the current and the next (b) Find the answers in (a) if the saving rate is changed to 30%. (c) Find the answers in (a) if the production function is changed to Y-F(K.L)-1.08-VKL
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...
Most questions answered within 3 hours.
-
Part 1. Primitive Types, Sorting, Recursion for
Homework.java
a) Implement the static method initializeArray that receives...
asked 48 minutes ago -
Using C++, build a sorter that can rank a sequence of numbers in
a descending order....
asked 45 minutes ago -
Derive ground state term symbols. Use notation 2S(1/2) for state
2S1/2
a) d5
b) f3
c)...
asked 1 hour ago -
A sample of size 31 will be drawn from a population with mean 39
and standard...
asked 1 hour ago -
What is the effect on the P-value when a test is changed from a
two-tailed hypothesis...
asked 1 hour ago -
I wish to estimate µ, the mean of a population. After I collect
and an-
alyze...
asked 2 hours ago -
At a local university, you poll a group of 115 students and find
that 37 of...
asked 2 hours ago -
Gladstone company tracks the number of units purchased and sold
throughout each accounting period but applies...
asked 2 hours ago -
When determining if a molecule's configuration is E or Z, what
determines the higher priority groups?
asked 2 hours ago -
13. What is the amount
of conversion cost transferred to finished goods? (Round
your intermediate calculations...
asked 2 hours ago -
Sulfuric Acid is a "strong" acid, but only releases a single
proton when it dissolves. What...
asked 2 hours ago -
The
second floor of a house is 6 m above the street level. How much
work...
asked 2 hours ago