Explain clearly what would happen to GDP per capita over time if the economy was hit...
Explain clearly what would happen to GDP per capita over time if the economy was hit for a long time (10 years, say) by capital-depreciating acid rain, which then cleared up (stopped) at the 10-year mark.
Homework Answers
Ans
Gdp per capita will clearly fall as per capita capital falls due
to depreciation of capital. This can be easily seen in solow model
where the depreciation curve will shift leftwards and thus steady
state level of per capita gdp falls. Here depreciation rate rises
from I1 to i2. With the result per capita income or gdp falls from
y2 to y1
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Explain clearly what would happen to GDP per capita over time if
the economy was hit...
Per capita GDP in the long run. Suppose an economy begins in steady state. By what...
Per capita GDP in the long run. Suppose an economy begins in steady state. By what proportion does per capita GDP change in the long run in response to the following change: (assume a= 1/3) A) depreciation rate changes: increases by 10%
8. Per capita GDP in the long run: Suppose an economy begins in steady state. By...
8. Per capita GDP in the long run: Suppose an economy begins in steady state. By what proportion does per capita GDP change in the long run in response to each of the following changes? (a) The investment rate doubles. (b) The depreciation rate falls by 10%. (c) The productivity level rises by 10%. (d) An earthquake destroys 75% of the capital stock. (e) A more generous immigration policy leads the population to double.
How is per capita GDP calculated, and what does it tell us about the economy? Explain?
How is per capita GDP calculated, and what does it tell us about the economy? Explain?
How is per capita GDP calculated, and what does it tell us about the economy? Explain?
How is per capita GDP calculated, and what does it tell us about the economy? Explain?
3. GDP trend and cycle: See Table 2 which shows UK real GDP per capita. Suppose...
3. GDP trend and cycle: See Table 2 which shows UK real GDP per capita. Suppose that the economy was at its trend in 2003. Suppose also that trend growth is one percent per year. Calculate the cycle using the formula Cycle = log (GDP)-log (Trend) In which years was the economy below trend? In which years was the economy above trend? What units is the cycle measured in? What year was the economy furthest above trend? In what year...
2)GDP per capita: a)is an average income per person in an economy. b)tells us about how...
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Please
answer all five parts
Consider the following table: GDP per capita (constant dollars) India USA 470 1985 32,300 1995 38,680 650 2005 48,760 1,010 2015 51,490 1,810 1. (9 points) Fill in the table below. Annualized growth rate India USA 1985 to 1995 1995 to 2005 2005 to 2015 (3 points) Output per person is close to output per hour. What do we call output per hour? 2. 3. (3 points) What are the three components that determine long...
1. While over the long run, the economy grows about 2 to 3% per year on average, over the shorter term, the economy goes through business cycles. Think about the growth rate of GDP, the inflation rate, and the unemployment rate over the last 12 quarters.
While over the long run, the economy grows about 2 to 3% per year on average, over the shorter term, the economy goes through business cycles. Think about the growth rate of GDP, the inflation rate, and the unemployment rate over the last 12 quarters. Once you’ve looked at the data, can you draw conclusions about the state of the economy? Would you describe the economy as booming, recovering, or in recession during the last few years? Why? Use the AD-AS model...
While over the long run, the economy grows about 2 to 3% per year on average,...
While over the long run, the economy grows about 2 to 3% per year on average, over the shorter term, the economy goes through business cycles. Think about the growth rate of GDP, the inflation rate, and the unemployment rate over the last 12 months. What conclusions about the state of the economy? Would you describe the economy as booming, recovering, or in recession during the last few years? Why? Use the AD-AS model to describe the economy. Which curve...
Consider an imaginary 10-year period over which output per person falls, but GDP increases. How can...
Consider an imaginary 10-year period over which output per person falls, but GDP increases. How can this happen? This is possible if O A. the rate of technical progress is small. B. the rate of unemployment is constant OC. the number of people in the corresponding population is stable D. the rate of increase in the other factors of production is high Do you think this is likely to be good for the economy? Such a long-term decline in output...
8. Per capita GDP in the long run: Suppose an economy begins in steady state. By what proportion does per capita GDP change in the long run in response to each of the following changes? (a) The investment rate doubles. (b) The depreciation rate falls by 10%. (c) The productivity level rises by 10%. (d) An earthquake destroys 75% of the capital stock. (e) A more generous immigration policy leads the population to double.
3. GDP trend and cycle: See Table 2 which shows UK real GDP per capita. Suppose that the economy was at its trend in 2003. Suppose also that trend growth is one percent per year. Calculate the cycle using the formula Cycle = log (GDP)-log (Trend) In which years was the economy below trend? In which years was the economy above trend? What units is the cycle measured in? What year was the economy furthest above trend? In what year...
Please
answer all five parts
Consider the following table: GDP per capita (constant dollars) India USA 470 1985 32,300 1995 38,680 650 2005 48,760 1,010 2015 51,490 1,810 1. (9 points) Fill in the table below. Annualized growth rate India USA 1985 to 1995 1995 to 2005 2005 to 2015 (3 points) Output per person is close to output per hour. What do we call output per hour? 2. 3. (3 points) What are the three components that determine long...
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