There are two countries, Anihc (country A) and Bapan (country B), with the same production function...
- There are two countries, Anihc (country A) and Bapan (country
B), with the same production function
fk=5k0.5. However,
country A has saving rates of 0.2, depreciation rate of 0.2 and
population growth of 0.2; while country B has saving rates of 0.1,
depreciation rate of 0.15 and population growth of 0.05. Using the
Solow model:
- Find the steady state capital-labor ratio for each country.
- Find the steady state output per worker, and the steady state consumption per worker for each country.
- Which country produces the most per capita? Which country consumes the most per capita?
Homework Answers
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There are two countries, Anihc (country A) and Bapan (country
B), with the same production function...
3.) There are two countries, Anihc (country A) and Bapan (country B), with the same production...
3.) There are two countries, Anihc (country A) and Bapan (country B), with the same production function . However, country A has saving rates of 0.2, depreciation rate of 0.2 and population growth of 0.2; while country B has saving rates of 0.1, depreciation rate of 0.15 and population growth of 0.05. Using the Solow model: a.) Find the steady state capital-labor ratio for each country. b.) Find the steady state output per worker, and the steady state consumption per...
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....
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. Suppose we know the following about Countries 1 and 2: Country l's production function is...
2. Suppose we know the following about Countries 1 and 2: Country l's production function is yı = A (k)", Country 2's production function is y2 = A2(k)", where y = output per capita, k = kapital per capita, A = productivity factor, and A1 > 12. At steady state kz > ki, where kj, ki, are steady state kapital per capita of Countries 2 and 1, respectively. Given the above information, what can we conclude about Country 2's output...
2. Consider two countries: Mahaliaville and UWIville. Both countries have the same production: Y = K...
2. Consider two countries: Mahaliaville and UWIville. Both countries have the same production: Y = K Neither country experiences population growth nor technological progress and both countries have a depreciation rate of 10%. Ma- haliaville saves 10 percent of ouput each year and UWIville saves 30% of output each year. (a) Find the steady-state levels of capital per worker, income per worker and consumption per worker for each country. (b) If both countries start with a capital stock per worker...
2. Consider two countries: Mahaliaville and UWIville. Both countries have the same production: Y = K...
2. Consider two countries: Mahaliaville and UWIville. Both countries have the same production: Y = K L Neither country experiences population growth nor technological progress and both countries have a depreciation rate of 10%. Ma- haliaville saves 10 percent of ouput each year and UWIville saves 30% of output each year. (a) Find the steady-state levels of capital per worker, income per worker and consumption per worker for each country. (b) If both countries start with a capital stock per...
Consider two countries: Frugalia (denoted by F) and Prodigalia (denoted by P). In both countries the...
Consider two countries: Frugalia (denoted by F) and Prodigalia (denoted by P). In both countries the production function is Cobb-Douglas: Y = A ⋅ K 1 3 N 2 3. The population growth rate (n) is 0.1, physical capital depreciates at the rate of 0.1; δ = 0.1, and A = 1. In F the saving rate is s F = 0.2 and in P it is s P = 0.4. a) (5pts) Write the production function in terms of...
A country’s aggregate production function is ? = 50 ×. The depreciation rate is d =...
A country’s aggregate production function is ? = 50 ×. The depreciation rate is d = 0.1, population growth rate is n = 0.025, saving rate is s = 0.2. What is the steady-state output per worker? What is the steady-state consumption per worker? What would be the golden steady-state consumption per worker?
pls solve parts d, e, f Suppose Country X's production function is given by F(K, AN)...
pls solve parts d, e, f
Suppose Country X's production function is given by F(K, AN) = 206,05(A, N.)05 where K, is the capital and A, N, is the effective worker. The evolution of the capital stock is given by K+1 = 0.74K, +1, where the depreciation rate is 26%. Additionally, the saving rate is 36%, the population growth rate is 4% and the technological growth rate is 10%. (a) Derive and show that in the Solow growth model, the...
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...
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. Suppose we know the following about Countries 1 and 2: Country l's production function is yı = A (k)", Country 2's production function is y2 = A2(k)", where y = output per capita, k = kapital per capita, A = productivity factor, and A1 > 12. At steady state kz > ki, where kj, ki, are steady state kapital per capita of Countries 2 and 1, respectively. Given the above information, what can we conclude about Country 2's output...
2. Consider two countries: Mahaliaville and UWIville. Both countries have the same production: Y = K Neither country experiences population growth nor technological progress and both countries have a depreciation rate of 10%. Ma- haliaville saves 10 percent of ouput each year and UWIville saves 30% of output each year. (a) Find the steady-state levels of capital per worker, income per worker and consumption per worker for each country. (b) If both countries start with a capital stock per worker...
2. Consider two countries: Mahaliaville and UWIville. Both countries have the same production: Y = K L Neither country experiences population growth nor technological progress and both countries have a depreciation rate of 10%. Ma- haliaville saves 10 percent of ouput each year and UWIville saves 30% of output each year. (a) Find the steady-state levels of capital per worker, income per worker and consumption per worker for each country. (b) If both countries start with a capital stock per...
pls solve parts d, e, f
Suppose Country X's production function is given by F(K, AN) = 206,05(A, N.)05 where K, is the capital and A, N, is the effective worker. The evolution of the capital stock is given by K+1 = 0.74K, +1, where the depreciation rate is 26%. Additionally, the saving rate is 36%, the population growth rate is 4% and the technological growth rate is 10%. (a) Derive and show that in the Solow growth model, the...
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