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
A. The golden rule level of capital per worker is .
B. The golden rule level of investment per worker is .
C. The golden rule level of output per worker is .
D. The golden rule savings rate is X% where X equals .
Homework Answers
Add Answer to:
Consider an economy having a Cobb Douglas production function,
where the share of capital income in...
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...
An economy has a Cobb-Douglas production function: Y = K"(LE)!-a The economy has a capital share...
An economy has a Cobb-Douglas production function: Y = K"(LE)!-a The economy has a capital share of 0.25, a saving rate of 40 percent, a depreciation rate of 3.00 percent, a rate of population growth of 0.75 percent, and a rate of labor- augmenting technological change of 2.0 percent. It is in steady state. b. Solve for capital per effective worker (k*), output per effective worker (y*), and the marginal product of capital.
An economy has a Cobb-Douglas production function: Y = K°(LE)1-a The economy has a capital share...
An economy has a Cobb-Douglas production function: Y = K°(LE)1-a The economy has a capital share of 0.25, a saving rate of 43 percent, a depreciation rate of 3.00 percent, a rate of population growth of 4.25 percent, and a rate of labor-augmenting technological change of 3.5 percent. It is in steady state. b. Solve for capital per effective worker (k*), output per effective worker (y*), and the marginal product of capital. k* = 2.83 y* * = 1.30 =...
An economy has a Cobb-Douglas production function: Y = Ka(LE)(1-a). The economy has a capital share...
An economy has a Cobb-Douglas production function: Y = Ka(LE)(1-a). The economy has a capital share of a third (means a= 1/3), a saving rate of 24 percent, a depreciation rate of 3 percent, and a rate of labor-augmenting technological change of 1 percent. It is in steady state. a. At what rate does total output, output per worker, and output per effective worker grow? b. Solve for steady state capital per effective worker, output per effective worker, consumption per...
If the U.S. production function is Cobb–Douglas with capital share 0.3, output growth is 3 percent per year, depreciatio...
If the U.S. production function is Cobb–Douglas with capital share 0.3, output growth is 3 percent per year, depreciation is 4 percent per year, and the Golden Rule steady-state capital–output ratio is 4.29, to reach the Golden Rule steady state, the saving rate must be: A) 17.5 percent. B) 25 percent. C) 30 percent. D) 42.9 percent.
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...
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...
Economic Growth II — Work It Out Question 1 An economy has a Cobb-Douglas production function:...
Economic Growth II — Work It Out Question 1 An economy has a Cobb-Douglas production function: Y = K (LE)-a The economy has a capital share of 0.25, a saving rate of 47 percent, a depreciation rate of 4.00 percent, a rate of population growth of 2.25 percent, and a rate of labor-augmenting technological change of 2.5 percent. It is in steady state. a. At what rates do total output and output per worker grow? Total output growth rate: %...
In the nation of Wiknam, the capital share of GDP is 40 percent, the average growth...
In the nation of Wiknam, the capital share of GDP is 40 percent,
the average growth in output is 4 percent per year, the
depreciation rate is 6 percent per year, and the capital–output
ratio is 5. Suppose that the production function is Cobb–Douglas
and that Wiknam has been in a steady state. (For a discussion of
the Cobb–Douglas production function, see Chapter 3.)
c. Suppose that public policy alters the saving rate so
that the economy reaches the Golden...
Economic Growth II - Work It Out Question 1 An economy has a Cobb Douglas production...
Economic Growth II - Work It Out Question 1 An economy has a Cobb Douglas production function: Y = K (LE). The economy has a capital share of 0.20, a saving rate of 50 percent, a depreciation rate of 3.50 percent, a rate of population growth of 4.00 percent, and a rate of labor augmenting technological change of 2.5 percent. It is in steady state. a. At what rates do total output and output per worker grow? Total output 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...
An economy has a Cobb-Douglas production function: Y = K"(LE)!-a The economy has a capital share of 0.25, a saving rate of 40 percent, a depreciation rate of 3.00 percent, a rate of population growth of 0.75 percent, and a rate of labor- augmenting technological change of 2.0 percent. It is in steady state. b. Solve for capital per effective worker (k*), output per effective worker (y*), and the marginal product of capital.
An economy has a Cobb-Douglas production function: Y = K°(LE)1-a The economy has a capital share of 0.25, a saving rate of 43 percent, a depreciation rate of 3.00 percent, a rate of population growth of 4.25 percent, and a rate of labor-augmenting technological change of 3.5 percent. It is in steady state. b. Solve for capital per effective worker (k*), output per effective worker (y*), and the marginal product of capital. k* = 2.83 y* * = 1.30 =...
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...
Economic Growth II — Work It Out Question 1 An economy has a Cobb-Douglas production function: Y = K (LE)-a The economy has a capital share of 0.25, a saving rate of 47 percent, a depreciation rate of 4.00 percent, a rate of population growth of 2.25 percent, and a rate of labor-augmenting technological change of 2.5 percent. It is in steady state. a. At what rates do total output and output per worker grow? Total output growth rate: %...
In the nation of Wiknam, the capital share of GDP is 40 percent,
the average growth in output is 4 percent per year, the
depreciation rate is 6 percent per year, and the capital–output
ratio is 5. Suppose that the production function is Cobb–Douglas
and that Wiknam has been in a steady state. (For a discussion of
the Cobb–Douglas production function, see Chapter 3.)
c. Suppose that public policy alters the saving rate so
that the economy reaches the Golden...
Economic Growth II - Work It Out Question 1 An economy has a Cobb Douglas production function: Y = K (LE). The economy has a capital share of 0.20, a saving rate of 50 percent, a depreciation rate of 3.50 percent, a rate of population growth of 4.00 percent, and a rate of labor augmenting technological change of 2.5 percent. It is in steady state. a. At what rates do total output and output per worker grow? Total output growth...
Most questions answered within 3 hours.
-
In python,write a function nameSet(first, last) that takes a
person's first and last names as input,...
asked 33 minutes ago -
How do you think we should value management? Specifically how
might we try to determine MRPL...
asked 25 minutes ago -
Suppose the Central Bank of Turkey starts to pay
interest on reserves. Under what circumstances this...
asked 34 minutes ago -
For Bergson the concept of Being contains less reality than does
the concept of Becoming. True...
asked 1 hour ago -
What is the hydroxide ion concentration, [OH-], in a solution
with a hydronium ion concentration, [H3O+]...
asked 1 hour ago -
What species is the reducing agent in the following
equation?
Mg(s) + 2HCl (aq) --> MgCl2(aq)...
asked 1 hour ago -
A 50g ice cube is taken out of a freezer at 0 degrees Celsius
and put...
asked 3 hours ago -
How do ratios help you determine trends? What specific
information do managers look at? Is there...
asked 3 hours ago -
A wavelength of 514 nm is used to find an unknown diffraction
grating. If the separation...
asked 3 hours ago -
Use the central limit theorem to find the mean and standard
error of the mean of...
asked 3 hours ago -
You will be given a file that will contain averages for classes
which are divided into...
asked 3 hours ago -
A Pew Research Center poll surveyed a random sample 850 voters
and asked them if they...
asked 3 hours ago