Suppose that all countries are identical in their saving rate and depreciation rate, and have the...
Suppose that all countries are identical in their saving rate and depreciation rate, and have the same aggregate production function. Suppose that the countries are different only in the population growth rate. What is the implication of the Solow model for output per worker in the long-run for each country? Explain why.
Homework Answers
We know growth rate in output per worker ya steady state is always zero for all countries.
thus growth rate of output per worker for all countries in long run/steady state will be 0.
However output per worker at steady state will be higher in an economy where population growth rate is lower or vice versa because when population rate is higher then with same saving rate, capital per worker increases at a lower pace compared to less population growth rate.
Add Answer to:
Suppose that all countries are identical in their saving rate
and depreciation rate, and have the...
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...
Countries 1 and 2 have the following production function: y = Akl. The saving rate in...
Countries 1 and 2 have the following production function: y = Akl. The saving rate in Country 1 is 5%, and in Country 2 is 20%. The two countries have the same level of productivity (or technology) A, and the same rate of depreciation 8. According to the Solow model, what is the ratio of steady-state output per capita in Country 1 to steady-state output per capita in Country 2? Show your calculations and provide intuition for your finding.
Consider the Solow growth model with depreciation rate and population growth rate n. The equation of...
Consider the Solow growth model with depreciation rate and population growth rate n. The equation of motion for the capital stock and the per worker production function in this economy are given by: Ak= s(f(k) - (8 + n) k y= f(k) = k1/4 a). Suppose adoption of modern birth control methods in a developing country causes the population growth rate to decrease. What happens in the main Solow diagram: what curve(s) shin, what happens to the steady- state level...
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...
3. The amount of education a person receives varies substantially among countries. Suppose you we...
3. The amount of education a person receives varies substantially among countries. Suppose you were to compare a country with a less educated labor force (with labor efficiency E1) and a country with a highly educated labor force (with labor efficiency E 2). Assume that education affects the level but not the growth of the efficiency of labor, that is E1
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....
Suppose there are two very similar countries (call them E and F). Both countries have the...
Suppose there are two very similar countries (call them E and F). Both countries have the same population and neither is experiencing population growth (that is, N is identical and constant in both countries). Both countries depreciate capital at the same rate, the both have the same savings rate, they both have the same technology, and there is no technological progress. Suppose that currently both countries are in steady state, when an earthquake destroys half of the capital stock of...
question r question 4 ECONI002 Introductory Macroeconomics Also, assume that the saving rate is s-0.2 for '...
question r
question 4
ECONI002 Introductory Macroeconomics Also, assume that the saving rate is s-0.2 for 'Milkie' and s-0.3 for 'Cookie', respectively, while the two countries have identical population grow and depreciation rates both equal to 0.1. Which country has a higher steady state income per capita? Determine the steady state income per capita for each country. Which country has a higher steady state growth rate in per capita income? Why? a. b. Assume now that 'Milkie' experiences a productivity...
Suppose there are two very similar countries (call them E and F). Both countries have the...
Suppose there are two very similar countries (call them E and F). Both countries have the same population and neither is experiencing population growth (that is, N is identical and constant in both countries). Both countries depreciate capital at the same rate, the both have the same savings rate, they both have the same technology, and there is no technological progress. Suppose that currently both countries are in steady state, when an earthquake destroys half of the capital stock of...
Notice this is a multiple answers question. Suppose there are two very similar countries (call them...
Notice this is a multiple answers question. Suppose there are two very similar countries (call them G and H). Both countries have the same population and both are experiencing population growth at the same rate (that is, N and 9N are identical in both countries). Both countries depreciate capital at the same rate, the both have the same savings rate, they both have the same technology, and technological progress happens at the same rate in both countries Suppose that currently...
Countries 1 and 2 have the following production function: y = Akl. The saving rate in Country 1 is 5%, and in Country 2 is 20%. The two countries have the same level of productivity (or technology) A, and the same rate of depreciation 8. According to the Solow model, what is the ratio of steady-state output per capita in Country 1 to steady-state output per capita in Country 2? Show your calculations and provide intuition for your finding.
Consider the Solow growth model with depreciation rate and population growth rate n. The equation of motion for the capital stock and the per worker production function in this economy are given by: Ak= s(f(k) - (8 + n) k y= f(k) = k1/4 a). Suppose adoption of modern birth control methods in a developing country causes the population growth rate to decrease. What happens in the main Solow diagram: what curve(s) shin, what happens to the steady- state level...
3. The amount of education a person receives varies substantially among countries. Suppose you were to compare a country with a less educated labor force (with labor efficiency E1) and a country with a highly educated labor force (with labor efficiency E 2). Assume that education affects the level but not the growth of the efficiency of labor, that is E1
Suppose there are two very similar countries (call them E and F). Both countries have the same population and neither is experiencing population growth (that is, N is identical and constant in both countries). Both countries depreciate capital at the same rate, the both have the same savings rate, they both have the same technology, and there is no technological progress. Suppose that currently both countries are in steady state, when an earthquake destroys half of the capital stock of...
question r
question 4
ECONI002 Introductory Macroeconomics Also, assume that the saving rate is s-0.2 for 'Milkie' and s-0.3 for 'Cookie', respectively, while the two countries have identical population grow and depreciation rates both equal to 0.1. Which country has a higher steady state income per capita? Determine the steady state income per capita for each country. Which country has a higher steady state growth rate in per capita income? Why? a. b. Assume now that 'Milkie' experiences a productivity...
Notice this is a multiple answers question. Suppose there are two very similar countries (call them G and H). Both countries have the same population and both are experiencing population growth at the same rate (that is, N and 9N are identical in both countries). Both countries depreciate capital at the same rate, the both have the same savings rate, they both have the same technology, and technological progress happens at the same rate in both countries Suppose that currently...
Most questions answered within 3 hours.
-
A 4.45 percent coupon municipal bond has 12 years left to
maturity and has a price...
asked 44 seconds from now -
Write a simple Python program to find the day for the given
date. The procedure to...
asked 6 minutes ago -
5) A semi-permeable membrane is used to separate pyruvic acid
from an aqueous solution of 0.1...
asked 8 minutes ago -
The resistance of the body varies from approximately 500 kΩ
(when it is very dry) to...
asked 12 minutes ago -
Please explain how participation income and expenses are
allocated to each partner. Where is this defined?
asked 22 minutes ago -
The tires of a car make 61 revolutions as the car reduces its
speed uniformly from...
asked 37 minutes ago -
Peabody, Inc., sells fireworks. The company’s marketing director
developed the following cost of goods sold budget...
asked 42 minutes ago -
A signal transduction pathway includes the steps listed
below.
1. An inactive signal transduction molecule is...
asked 41 minutes ago -
1. The correlation coefficient determined for two variables has
a value of 0.89. Describe, in words,...
asked 47 minutes ago -
The following data relate to direct materials costs for
November:
Actual costs
4,700 pounds at $5.35...
asked 45 minutes ago -
Kyle, a 95.0 kg football player, leaps straight up into the air
(with no horizontal velocity)...
asked 1 hour ago -
Which of the following is a measure of profitability?
A.
Quick (acid-test) ratio
B.
Net sales...
asked 1 hour ago