Per capita GDP in the long run. Suppose an economy begins in steady state. By what...
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capita GDP in the long run. Suppose an economy begins in steady
state. By what...
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.
Question 7 Suppose an economy begins in steady state which has a production function of Y...
Question 7 Suppose an economy begins in steady state which has a production function of Y = ĀK3L3. By what proportion does per capita GDP change in the long run (at the steady state) 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...
1. President Trump has been campaigning for stricter immigration laws and for the deportation of millions...
1. President Trump has been campaigning for stricter immigration laws and for the deportation of millions of undocumented workers in the US. These policies can impact an est imated 10 million undocumented wor kers currently living in the US. Assume that Trump is successful in his deportation policy and as a result, the US economy experiences an immediate and permanent decrease in the level of the labor force. In particular suppose it decreases permanently from L to L. Assuming the...
Find the steady state level of capital for this economy. please help with D. Exercise 1...
Find the steady state level of capital for this
economy.
please help with D.
Exercise 1 (50 Points]: The Solow Growth Model Consider an economy where there are 1,354 agents, each of them having one unit of available time to labor. There is no government. There is a representative firm that has a Cobb-Douglas production technology that creates output (or income) following the form of Y = 2KN- The depreciation rate is 4.9%, the population of agents grows at 1.2%...
4. Consider the Solow growth model. By what proportion does per capita output change in the...
4. Consider the Solow growth model. By what proportion does per capita output change in the long run in response to the following changes? Assume the usual production function: Y; = ĀK, L (a) (5 points) The investment rate decreases by 30% as a result of a tax increase. (b) (5 points) The population increases by 10%. (c) (5 points) The capital stock decreases by 20%. (d) (5 points) The depreciation rate increases by 5%.
6. An earthquake: Consider a Solow economy that begins in a steady state. Then a strong...
6. An earthquake: Consider a Solow economy that begins in a steady state. Then a strong earthquake destroys half the capital stock. Use a Solow diagram to explain how the economy behaves over time. Draw a graph showing how output evolves over time, and explain what happens to the level and growth rate o per capita GDP. (Hint: Pay close attention to footnote 4 on page 121 - does any curve shift?)
Economics: Suppose the economy is in long-run equilibrium, with real GDP at $16 trillion and the...
Economics: Suppose the economy is in long-run equilibrium, with real GDP at $16 trillion and the unemployment rate at 5%. Now assume that the central bank increases the money supply by 6%. a. Illustrate the short-run effects on the macro-economy by using the aggregate supply-aggregate demand model. Be sure to indicate the direction of change in Real GDP, the Price Level, and the Unemployment Rate. Label all curves and axis for full credit.
Refer to the figure above. Suppose the economy is currently in steady state. Furthermore, suppose the...
Refer to the figure above. Suppose the economy is currently in steady state. Furthermore, suppose the current savings rate (the one depicted in the figure) is higher than the golden rule savings rate. Which of the following statements is correct? To maximize steady state consumption per capita, the economy should aim for a steady state where capital per effective worker is less than D To maximize steady state consumption per capita, the economy should aim for a steady state where...
Per Capita GDP Economy A Economy B GDP: 400000 442200 GDP: 100000 &nb
Per Capita GDP Economy A Economy B GDP: 400000 442200 GDP: 100000 124000 Population: 8 8.04 Population: 20 24 1.Which economy grew? 2.Which economy grew more in $? 3.Which economy grew more in %? 4.Which has more people? 5.Which population grew? 6.Which population grew more in percent? 7.Which added more people? 8.Which has more per capita? 9.Which grew in per capita terms? 10.Which grew more in $ per capita? 11.Which grew more in % per capita? 12.Which is happier?
5. Foreign aid: Consider a Solow economy that begins with a cap to $300 billion, and...
5. Foreign aid: Consider a Solow economy that begins with a cap to $300 billion, and suppose its steady-state level of capital is 1o its pleasant surprise, the economy receives a generous gift of foreign aru in the form of $100 billion worth of capital (electric power plants, machine tools, etc.). (a) Use the Solow diagram, other graphs, and the mathematics of the Solow model to explain what happens to the economy, both immediately and over time. By what proportion...
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.
Question 7 Suppose an economy begins in steady state which has a production function of Y = ĀK3L3. By what proportion does per capita GDP change in the long run (at the steady state) 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...
1. President Trump has been campaigning for stricter immigration laws and for the deportation of millions of undocumented workers in the US. These policies can impact an est imated 10 million undocumented wor kers currently living in the US. Assume that Trump is successful in his deportation policy and as a result, the US economy experiences an immediate and permanent decrease in the level of the labor force. In particular suppose it decreases permanently from L to L. Assuming the...
Find the steady state level of capital for this
economy.
please help with D.
Exercise 1 (50 Points]: The Solow Growth Model Consider an economy where there are 1,354 agents, each of them having one unit of available time to labor. There is no government. There is a representative firm that has a Cobb-Douglas production technology that creates output (or income) following the form of Y = 2KN- The depreciation rate is 4.9%, the population of agents grows at 1.2%...
4. Consider the Solow growth model. By what proportion does per capita output change in the long run in response to the following changes? Assume the usual production function: Y; = ĀK, L (a) (5 points) The investment rate decreases by 30% as a result of a tax increase. (b) (5 points) The population increases by 10%. (c) (5 points) The capital stock decreases by 20%. (d) (5 points) The depreciation rate increases by 5%.
5. Foreign aid: Consider a Solow economy that begins with a cap to $300 billion, and suppose its steady-state level of capital is 1o its pleasant surprise, the economy receives a generous gift of foreign aru in the form of $100 billion worth of capital (electric power plants, machine tools, etc.). (a) Use the Solow diagram, other graphs, and the mathematics of the Solow model to explain what happens to the economy, both immediately and over time. By what proportion...
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