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Consider an economy described the following parameters: S=0.2 n=0.01 and 6 =0.04. The production function...
Consider an economy described the following parameters: S=0.2 n=0.01 and 6 =0.04. The production function is...
Consider an economy described the following parameters: S=0.2 n=0.01 and 6 =0.04. The production function is given by y = k0.5 so that the steady-state y*=4 and the steady-state k*=16. At present k=12. Determine the percent rate of growth of y at this instant. Enter the value with two decimal places without the % sign. If the growth is negative, do enter the negative sign! Answer: -1.16 Be careful to find the growth rate of y. First you must find...
Suppose an economy described by the Solow model has the following production function: 1/2 1/2 Y=K...
Suppose an economy described by the Solow model has the following production function: 1/2 1/2 Y=K (LE) . a. For this economy, what is f(k)? b. Use your answer to part (a) to solve for the steady-state value of y as a function of s, n, g, and ?. c. Two neighboring economies have the above production function, but they have different parameter values. Atlantis has a saving rate of 28 percent and a population growth rate of 1 percent...
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* =
2. Suppose an economy described by the Solow model has the following production function and capital...
2. Suppose an economy described by the Solow model has the following production function and capital law of motion, with the variables as defined in class: Y =K^(1/2)(LE)^(1/2) ∆k = sy − (δ + n + g)k The economy has a saving rate of 24 percent, a depreciation rate of 3 percent, a population growth rate of 2 percent, and a growth rate of labor productivity of 1 percent. (a) At what rate do total output (Y ), output per...
Economic Growth II-End of Chapter Problem Suppose an economy described by the Solow model has the...
Economic Growth II-End of Chapter Problem Suppose an economy described by the Solow model has the following production function: Y-K (LE a. For this economy, what is f(k)? f(k) b. Use your answer in part a to solve for the steady-state value of y as a function of s, n, g, and 6. y Suppose two neighboring economies have the above production function, but they have different parameter values. Atlantis has a saving rate of 28% per year and a...
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...
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...
Solow Growth Model D. Consider an economy with production characterized by function Y = AVKL, per...
Solow Growth Model D. Consider an economy with production characterized by function Y = AVKL, per capita output y = AVkt with rate of depreciation of capital 8, investment it = sy. = sAvky, capital transition function kt+1 - k = SAVk - Okt, where s is savings ratio. 1. Putting per capita output (income) y on the y-axis and k on the x-axis, graph the curves for depre- ciation and investment. Label steady state capital k* and steady state...
3-a country called dontThinkLand has the following parameters: =0.15 s=0.2 n=0.1 g=0 a- what is the...
3-a country called dontThinkLand has the following parameters: =0.15 s=0.2 n=0.1 g=0 a- what is the economy's per effective labor output (y= Y/EL and the k = K/EL and c= C/EL) in the steady state? k= y = b-after reaching the steady state, what is the growth in per capita output (Y/L): 4-a country called smartPeopleLand has the following parameters: s=0.2 0.15 n 0.1 g=0.3 a- what is the economy's per effective labor output (y= = K/EL and c= C/EL)...
Consider an economy described the following parameters: S=0.2 n=0.01 and 6 =0.04. The production function is given by y = k0.5 so that the steady-state y*=4 and the steady-state k*=16. At present k=12. Determine the percent rate of growth of y at this instant. Enter the value with two decimal places without the % sign. If the growth is negative, do enter the negative sign! Answer: -1.16 Be careful to find the growth rate of y. First you must 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* =
Economic Growth II-End of Chapter Problem Suppose an economy described by the Solow model has the following production function: Y-K (LE a. For this economy, what is f(k)? f(k) b. Use your answer in part a to solve for the steady-state value of y as a function of s, n, g, and 6. y Suppose two neighboring economies have the above production function, but they have different parameter values. Atlantis has a saving rate of 28% per year and a...
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...
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...
Solow Growth Model D. Consider an economy with production characterized by function Y = AVKL, per capita output y = AVkt with rate of depreciation of capital 8, investment it = sy. = sAvky, capital transition function kt+1 - k = SAVk - Okt, where s is savings ratio. 1. Putting per capita output (income) y on the y-axis and k on the x-axis, graph the curves for depre- ciation and investment. Label steady state capital k* and steady state...
3-a country called dontThinkLand has the following parameters: =0.15 s=0.2 n=0.1 g=0 a- what is the economy's per effective labor output (y= Y/EL and the k = K/EL and c= C/EL) in the steady state? k= y = b-after reaching the steady state, what is the growth in per capita output (Y/L): 4-a country called smartPeopleLand has the following parameters: s=0.2 0.15 n 0.1 g=0.3 a- what is the economy's per effective labor output (y= = K/EL and c= C/EL)...
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