Homework Answers
C) is the saving rate times the capital per worker
The consumption per worker under golden rule is the saving rate times the capital per worker.
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The consumption per worker under the golden rule (in Lecture 5): a. none O b. is...
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...
1.The Golden Rule in a Solow Model without a Cobb-Douglas Production Function Suppose that the per-worker...
1.The Golden Rule in a Solow Model without a Cobb-Douglas Production Function Suppose that the per-worker production function is: 4k tk +3 where yt = Yt/L and kt = Kt/L A.Does this production function exhibit diminishing marginal product of capital? Illustrate and explain. Note that you can use calculus, but you can also create a table. Note that AKt+1- Akt+1 and: B.Suppose that the savings rate in this economy is 36 percent (s- 0.36) and the depreciation rate is 6...
2. Consumption per worker is 72, depreciation is 12.5%, and capital per worker is 64, the...
2. Consumption per worker is 72, depreciation is 12.5%, and capital per worker is 64, the population growth rate is 2 percent. Given the production function y - 20k1/3, show that this economy is not in a steady state. If the saving rate should double, what is the new steady- state level of consumption per worker?
Assume an economy is populated by L workers with total capital stock K. Production of this...
Assume an economy is populated by L workers with total capital stock K. Production of this KL. Suppose household's saving rate s economy is organized by Y 0.6, and firm's depreciation rate of capital d = 0.1. The rule for accumulation of captial in per worker terms is of the time-to-build type: A k = i - ôk Standard Transformation of the Production Function a. Show that the production function is constant return to scale (CRS) b. Rewrite the production...
ALL OF THE QUESTIONS PLS!!! Assume an economy is populated by L workers with total capital stock K. Production of this...
ALL OF THE QUESTIONS PLS!!!
Assume an economy is populated by L workers with total capital stock K. Production of this KL. Suppose household's saving rate s economy is organized by Y 0.6, and firm's depreciation rate of capital d = 0.1. The rule for accumulation of captial in per worker terms is of the time-to-build type: A k = i - ôk Standard Transformation of the Production Function a. Show that the production function is constant return to scale...
good weekend! Problem 1 Assume an economy is populated by L workers with total capital stock...
good weekend! Problem 1 Assume an economy is populated by L workers with total capital stock K. Production of this economy is organized by Y = K L.. Suppose household's saving rate s = 0.6, and firm's depreciation rate of capital 8 = 0.1. The rule for accumulation of captial in per worker terms is of the time-to-build type: Ak=¿- Sk. Standard Transformation of the Production Function a. Show that the production function is constant return to scale (CRS). b....
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.
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...
Consider an economy with the following production function zf(k ∗ ) = z (k ∗ )^0.5...
Consider an economy with the following production function zf(k ∗ ) = z (k ∗ )^0.5 1. Solve for golden rule capital per worker and optimal savings rate using the equation characterizing the best steady state. Then, you can back out optimal saving rate given that the best capital per worker. 2. Assume that we are at the steady state with a saving rate s1 < sgold. If the government increases the saving rate up to sgold through policies, what...
If the economy has more capital than in the Golden Rule steady state, reducing the saving...
If the economy has more capital than in the Golden Rule steady state, reducing the saving rate will: A.increase steady-state income but decrease steady-state consumption. B.decrease both steady-state income and steady-state consumption. C.increase both steady-state income and steady-state consumption. D.decrease steady-state income but increase steady-state consumption.
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...
1.The Golden Rule in a Solow Model without a Cobb-Douglas Production Function Suppose that the per-worker production function is: 4k tk +3 where yt = Yt/L and kt = Kt/L A.Does this production function exhibit diminishing marginal product of capital? Illustrate and explain. Note that you can use calculus, but you can also create a table. Note that AKt+1- Akt+1 and: B.Suppose that the savings rate in this economy is 36 percent (s- 0.36) and the depreciation rate is 6...
2. Consumption per worker is 72, depreciation is 12.5%, and capital per worker is 64, the population growth rate is 2 percent. Given the production function y - 20k1/3, show that this economy is not in a steady state. If the saving rate should double, what is the new steady- state level of consumption per worker?
Assume an economy is populated by L workers with total capital stock K. Production of this KL. Suppose household's saving rate s economy is organized by Y 0.6, and firm's depreciation rate of capital d = 0.1. The rule for accumulation of captial in per worker terms is of the time-to-build type: A k = i - ôk Standard Transformation of the Production Function a. Show that the production function is constant return to scale (CRS) b. Rewrite the production...
ALL OF THE QUESTIONS PLS!!!
Assume an economy is populated by L workers with total capital stock K. Production of this KL. Suppose household's saving rate s economy is organized by Y 0.6, and firm's depreciation rate of capital d = 0.1. The rule for accumulation of captial in per worker terms is of the time-to-build type: A k = i - ôk Standard Transformation of the Production Function a. Show that the production function is constant return to scale...
good weekend! Problem 1 Assume an economy is populated by L workers with total capital stock K. Production of this economy is organized by Y = K L.. Suppose household's saving rate s = 0.6, and firm's depreciation rate of capital 8 = 0.1. The rule for accumulation of captial in per worker terms is of the time-to-build type: Ak=¿- Sk. Standard Transformation of the Production Function a. Show that the production function is constant return to scale (CRS). b....
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.
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