Explain in detail whether the following is true or false: As an economy moves along the...
Explain in detail whether the following is true or false: As an economy moves along the balanced growth path of the Solow model, its net investment will be zero at each instant.
Homework Answers
False
Explanation: In the balanced growth path, the output and the capital grows at the same rate.
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Explain in detail whether the following is true or false: As an
economy moves along the...
For each statement, decide whether it is True, False or Uncertain and explain why briefly 1-...
For each statement, decide whether it is True, False or Uncertain and explain why briefly 1- Y=w*L + r *K , where Y is GDP, is this equation true? And if it is, can you explain the intuition? 2- Output is a function of Capital and Labor. In the Solow growth model, you can save and grow your capital indefinitely, and then your economy will always grow and standards of living will rise forever. 3- In the neoclassical model, government...
2. Explain whether the following italicized statement is true or false. Assume that a war destroy...
2. Explain whether the following italicized statement is true or false. Assume that a war destroys a smaller portion of a country's capital stock relative to its labor causalities. If the saving rate is unchanged, the Solow model would predict that the immediate impact is a higher output per worker, then a positive transitional rate of growth of output per worker and, eventually that the new steady state will approach a higher output per worker than before the war. Assume...
MORE EXERCISES 1. Transition dynamics: What is the principle of transition dynamics in the com- bined...
MORE EXERCISES 1. Transition dynamics: What is the principle of transition dynamics in the com- bined Solow-Romer model? 2. Long-run growth: Growth in the combined Solow-Romer model is faster than growth in the Romer model. In what sense is this true? Why is it true? 3. Balanced growth: Suppose we observe the following growth rates in various economies. Discuss whether or not each economy is on its balanced growth path. (a) A European economy: gy/l = 0.03,gkil = 0.03. (b)...
14. One of the following is NOT a feature of the Solow Model a) long-term economic...
14. One of the following is NOT a feature of the Solow Model a) long-term economic growth rate b) If an economy is far from its steady-state level, it grows faster, so the closer the economy is to the steady-state value the growth rate moves to zero c) capital accumulation cannot serve as the engine of long-run economic growth d) Eventually net investment - subtracting depreciation from investment is zero and the economy stabilizes at the steady state 15. Consider...
True/False Explain. Indicate whether each of the following statements is true or false and then explain...
True/False Explain. Indicate whether each of the following statements is true or false and then explain why you think this, Include in your explanation any pertinent institutional details and economic reasoning (including appropriate graphs and equations). a. Suppose you are interested in estimating the elasticity of demand for medical care. A good way to do this would be to compare the quantity demanded by people with insurance to the quantity demanded by people who chose not to buy insurance, and...
TRUE-FALSE-UNCERTAIN For each of the following claims, indicate whether it is true or false, or whether...
TRUE-FALSE-UNCERTAIN For each of the following claims, indicate whether it is true or false, or whether it could be either one, depending on circumstances. Then, explain why. Your grade will depend on your explanation. Try to make sure your explanation is not only correct but thorough. In particular, if a statement is false for more than one reason, discuss all those reasons (even though, logically, it takes just one contradiction to make the entire statement false). Doing this will prepare...
State whether the following statement is true or false, and explain why. If the statement is...
State whether the following statement is true or false, and explain why. If the statement is false, state the true change. If the national economy shrank at an annual rate of 9% per year for four consecutive years, then the economy shrank by 36% over the four-year period. Choose the correct answer below and, if necessary, fill in the answer box to complete your choice. The statement is false because each year there is a different reference value. The economy...
True or False. State whether the following statements are true or false and explain why the...
True or False. State whether the following statements are true or false and explain why the statement is true or false. (2 points each) 5. The greenhouse effect is a man-made phenomenon that is caused by fossil fuel burning. 6. Southern California is a global biodiversity hotspot because of its high alpha diversity. 7. Elevated CO2 exposure will cause a decline in plant tissue nitrogen concentration. 8. Elevated CO2 will cause a greater biomass increase for C3 plants than C4...
Briefly explain whether each of the following statements is true or false. 4. The shoe-leather cost...
Briefly explain whether each of the following statements is true or false. 4. The shoe-leather cost of inflation is minimized by targeting a zero rate of inflation.
Explain whether each of the following statements is True or False. Provide a short explanation. At...
Explain whether each of the following statements is True or False. Provide a short explanation. At a discount rate of zero the NPVs of two projects are the same. However, this fact tells us nothing about the actual cash flows of the projects themselves.
For each statement, decide whether it is True, False or Uncertain and explain why briefly 1- Y=w*L + r *K , where Y is GDP, is this equation true? And if it is, can you explain the intuition? 2- Output is a function of Capital and Labor. In the Solow growth model, you can save and grow your capital indefinitely, and then your economy will always grow and standards of living will rise forever. 3- In the neoclassical model, government...
2. Explain whether the following italicized statement is true or false. Assume that a war destroys a smaller portion of a country's capital stock relative to its labor causalities. If the saving rate is unchanged, the Solow model would predict that the immediate impact is a higher output per worker, then a positive transitional rate of growth of output per worker and, eventually that the new steady state will approach a higher output per worker than before the war. Assume...
MORE EXERCISES 1. Transition dynamics: What is the principle of transition dynamics in the com- bined Solow-Romer model? 2. Long-run growth: Growth in the combined Solow-Romer model is faster than growth in the Romer model. In what sense is this true? Why is it true? 3. Balanced growth: Suppose we observe the following growth rates in various economies. Discuss whether or not each economy is on its balanced growth path. (a) A European economy: gy/l = 0.03,gkil = 0.03. (b)...
14. One of the following is NOT a feature of the Solow Model a) long-term economic growth rate b) If an economy is far from its steady-state level, it grows faster, so the closer the economy is to the steady-state value the growth rate moves to zero c) capital accumulation cannot serve as the engine of long-run economic growth d) Eventually net investment - subtracting depreciation from investment is zero and the economy stabilizes at the steady state 15. Consider...
True/False Explain. Indicate whether each of the following statements is true or false and then explain why you think this, Include in your explanation any pertinent institutional details and economic reasoning (including appropriate graphs and equations). a. Suppose you are interested in estimating the elasticity of demand for medical care. A good way to do this would be to compare the quantity demanded by people with insurance to the quantity demanded by people who chose not to buy insurance, and...
TRUE-FALSE-UNCERTAIN For each of the following claims, indicate whether it is true or false, or whether it could be either one, depending on circumstances. Then, explain why. Your grade will depend on your explanation. Try to make sure your explanation is not only correct but thorough. In particular, if a statement is false for more than one reason, discuss all those reasons (even though, logically, it takes just one contradiction to make the entire statement false). Doing this will prepare...
True or False. State whether the following statements are true or false and explain why the statement is true or false. (2 points each) 5. The greenhouse effect is a man-made phenomenon that is caused by fossil fuel burning. 6. Southern California is a global biodiversity hotspot because of its high alpha diversity. 7. Elevated CO2 exposure will cause a decline in plant tissue nitrogen concentration. 8. Elevated CO2 will cause a greater biomass increase for C3 plants than C4...
Briefly explain whether each of the following statements is true or false. 4. The shoe-leather cost of inflation is minimized by targeting a zero rate of inflation.
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