1. If the saving rate s=80 percent, the steady state level of output per unit of effective labor at time tis equal to ... 2. If the saving rate s=80 percent, the steady state level of consumption per unit of effective labor at time tis equal to ...
Q: 11 1. Assume that a country's production function is Y = KāLĒ. Assume there is no population growth…
A: "Steady state refers to the economy that has a stable population and consumption." In this economy,…
Q: Suppose that the per hour worked form of the production function for an economy is given by y= 10k3.…
A: The Solow model is an exogeneous growth model which states that the economy can attain short run…
Q: In the Malthusian model, suppose that the quantity of land increases. Determine what effects this…
A: Macroeconomics is a sub-part of economics that is used to understand, the policies and fiscal…
Q: Question 9. Suppose that an economy has the following production function: Y = F(K, L) = K©.a 20.7,…
A: Production functions: The technical relationship between quantities of physical inputs and…
Q: Some data at first might seem puzzling: The share of GDP devoted to investment was similar for…
A: Growth rate represents the average amount of change measured either per year or per month across a…
Q: Consider an economy in which the labour force grows by 2.7 percent per annum, physical capital grows…
A: If the residual (a) equals 0, the annual labor force growth rate (gL) equals 2.7%, the annual…
Q: Identify each of the following topics as being part of microeconomics or macroeconomics: d.factors…
A: The study of economics deals with how scarce resources are allocated in a manner that most of the…
Q: Consider two countries with comparable natural resources which devoted exactly the same shares of…
A: The following problem, in relation to economic growth has been answered as follows:
Q: In the endogenous growth model presented in the text, suppose that u represents the fraction of time…
A: To find : Growth rate of consumption.
Q: Suppose that an economy has the following production function: Y = F(K, LE) = K1/2(LE)1/2 Assume…
A: production function:- Production performance the assembly performance is also a serious conception…
Q: c. Suppose that public policy alters the saving rate so that the economy reaches the Golden Rule…
A: Note - Since you have posted multiple independent questions in the same request, we will solve the…
Q: What happens in the steady state to the capital-labor ratio, output per worker, and consumption per…
A: The productivity falls, it means now less capital will be available per workers. The low capital…
Q: If an economy moves from a steady state with a low saving rate to a higher savin rate, then in the…
A: Steady-state output per worker growth is equal to the growth rate of technology (i.e., g) So, an…
Q: Many countries, including Pakistan, import substantial amounts of goods and services from other…
A: a) It is totally true that if a nation produces more of goods and services, then the standard of…
Q: If the economy has more capital than in the Golden Rule steady state, reducing the saving rate will…
A: The savings refers to the level of remaining amount after all the consumption expenditure are…
Q: Suppose the production function is given by Y= VK\N, where Y is the amount of output, K is the…
A: Production function, Y = K NY = OutputK = CapitalN = WorkersSavings rate = sDepreciation rate = δ
Q: Assume that the rate of growth of population equals 0. Suppose that there is a sudden increase in…
A:
Q: 2. In Wonderland production per worker (y) depends on capital per worker (k) such that y = 10Vk.…
A: I have provided the handwritten solution,
Q: Consider a Solow-Swan economy with a Cobb-Douglas production function. Imagine that the savings rate…
A: Note:- Since we can only answer up to three subparts, we'll answer the first three. Please repost…
Q: a) What is the growth rate of output per worker before the change? What happens to this growth rate…
A:
Q: Suppose that the economy's production function is Y = √K√LA where K is capital, L is labor, and A is…
A: Production function : Y = (K)0.5 (LA)0.5 To find the steady state we convert above production…
Q: Consider the following (made-up) statistics for some econ-omies. Assume the exponent on capital is…
A: Growth accounting is a process by which the contribution of different factor inputs into economic…
Q: Consider a closed economy in which the population grows at the rate of 2% per year. The per-worker…
A: At steady state, capital per worker and output per worker remain constant. Steady state is reached…
Q: 1. Let F(K, AN) denote a production function that satisfies constant returns to scale. For an…
A: Given production function Y=f(K,AN) Labor augmented production function Y--- output K--- capital…
Q: Q)If the economy is in a steady state, then A. both consumption per worker and capital per worker…
A: A steady state of economy is defined as an equilibrium between production growth and population…
Q: In Wonderland production per worker (y) depends on capital per worker (3) such the y=10√k. Every…
A: The question is related to the Solow model of economic growth.
Q: Assume an economy has grown by 8% per year over the past 20 years. During the same period, the…
A: The parameters given here are as follows: Growth rate in economy per year for past 20years= 8%;…
Q: Suppose some of the country's capital is suddenly destroyed. If the depreciation rate, savings rate,…
A: Suppose some of the country's capital is suddenly destroyed. If the depreciation rate, savings rate,…
Q: The long-run effects of an increase in the saving rate include...? a. a higher level of…
A: We assume that the factors of production have diminishing returns to scale. So if the savings rate…
Q: For an economy in which there is no technological progress, explain what must happen for the steady…
A: Steady State is defined as an equilibrium growth path in Solow Model where the variables tend to…
Q: Suppose there is an increase in the saving rate. We know that this will cause an increase in which…
A: Solow growth model is an exogeneous growth model which argues that in the short run growth is…
Q: Suppose that the production function is Y = 10 ( K )^1/4 ( L )^3/4 and capital lasts for an average…
A: Introduction We have given a production function and capital last for average of 50 years. a)…
Q: Farmland is a developing country with the following production function: Y = 24L2/3K1/3 with Y =…
A: The production function is that function which shows the relationship between output produced by the…
Q: In an economy, the capital share of GDP is about 30 percent, the average growth in output is about 3…
A: In an economy, the capital share of GDP is about 30 percent, the average growth in output is about 3…
Q: The COVID-19 pandemic has caused an unprecedented increase in savings in many countries around the…
A: As a negative effect of COVID -19 economies have taken a hit on consumer sentiment which directly…
Q: Consider an economy described by the production function Y=F(K, L)=?^0.4?^0.6 A) What is the…
A: Meaning of Production Function: The term production function refers to the situation under which a…
Q: 2. If the production function is given by Y-A(K¿L)°.5 where Y is the output, A is the technology, L…
A: Understanding the Solow growth model is crucial. A growth model aids in forecasting the state of…
Q: ome data at first might seem puzzling: The share of GDP devoted to investment was similar for…
A: The term 'economic growth’ refers to the increase in the value of services and commodities produced…
Q: In a steady-state economy (i.e., the economy is at steady-state equilibrium) with 1% population…
A: The Solow growth model is generally used to show how growth in the labor force, increase in capital…
Q: Suppose you add a variable rate of population growth to a two-sector model of growth. Draw and…
A: The two-sector model is an analytical framework that embodies unreal dynamic economies with two…
Q: 5. Suppose that the economy's production function is Y = √K√LA where K is capital, L is labor, and A…
A: The Solow Model steady state shows how the savings per worker per period is equal to the change in…
Step by step
Solved in 2 steps with 23 images
- Population Growth and Technological Progress – Work It Out PLEASE WRITE ANSWERS CLEARLY An economy has a Cobb-Douglas production function: Y = K“(LE)'-a The economy has a capital share of 0.30, a saving rate of 42 percent, a depreciation rate of 4.00 percent, a rate of population growth of 5.25 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* = y* = marginal product of capital =Assume that a country's production function is Y = K1/2L1/2 and there is no population growthor technological change.a. What is the per-worker production function y = f (k)?b. Assume that the country possesses 40,000 units of capital and 10,000 units of labor. What isY? What is labor productivity computed from the per-worker production function? Is thisvalue the same as labor productivity computed from the original production function?c. Assume that 10 percent of capital depreciates each year. What gross saving rate isnecessary to make the given capital–labor ratio the steady-state capital–labor ratio? (Hint:In a steady state with no population growth or technological change, the saving ratemultiplied by per-worker output must equal the depreciation rate multiplied by the capital–labor ratio.)d. If the saving rate equals the steady-state level, what is consumption per worker?Assume that a country's production function is Y = K1/2L1/2 and there is no population growthor technological change.a. What is the per-worker production function y = f (k)?b. Assume that the country possesses 40,000 units of capital and 10,000 units of labor. What isY? What is labor productivity computed from the per-worker production function? Is thisvalue the same as labor productivity computed from the original production function?c. Assume that 10 percent of capital depreciates each year. What gross saving rate isnecessary to make the given capital–labor ratio the steady-state capital–labor ratio? (Hint:In a steady state with no population growth or technological change, the saving ratemultiplied by per-worker output must equal the depreciation rate multiplied by the capital–labor ratio.)d. If the saving rate equals the steady-state level, what is consumption per worker? Only D, other option answered
- Population Growth and Technological Progress-Work It Out An economy has a Cobb-Douglas production function: Y = K (LE)¹- The economy has a capital share of 0.20, a saving rate of 49 percent, a depreciation rate of 4.00 percent, a rate of population growth of 1.50 percent, and a rate of labor-augmenting technological change of 4.0 percent. It is in steady state. a. At what rates do total output and output per worker grow? Total output growth rate: Output per effective worker is constant in the steady state and does not change. increases in the steady state. declines in the steady state. % Output per worker growth rate: %Suppose an economy begins in steady state. By what proportion does per capita GDP change in the long run in reponse to each of the following changes? Production function is Y=AK^1/3L^2/3 d. Earthquake destrys 75% of the capital stock e. Generous immigration policy lead the population to double Fast answerSuppose that , z the marginal product of efficiency units of labor, increases in the endogenous growth model. What effects does this have on the rates of growth and the levels of human capital, consumption, and output? Explain your results.
- Production function is given by Y = 3K"(AN)!-a, where a=2/3. The rate of depreciation of capital is equal to 12 percent, the rate of technological progress is equal to 5 percent, and the rate of population growth is equal to 3 percent. The economy was in the steady state at time t and the level of technology was equal to A:=30. Use the Solow growth model to answer the following questions. (Please fill in numbers; use a comma as a decimal separator: 10,5) 1. If the saving rate s=40 percent, the steady state level of output per unit of effective labor at time t is equal to 2. If the saving rate s=40 percent, the steady state level of consumption per unit of effective labor at time t is equal to 3. If the saving rate s=40 percent, the steady state level of consumption per worker at time t is equal toQUESTION 22 whereas in the Solow model In the Romer model, the balanced growth path is equal to OAG-A; the steady-state level of capital is zero OB.0; infinity ; the growth rate declines as economy approaches the steady state O D. the level of the number researchers in an economy; capital is scarce OE. g=lL: there is a steady state G H. K. V. M Control Alt 無要換 Altda qaoudon Suppose that the production function is given by Y=05/K √N, where Y is output, K is capital, and N is the number of workers. The steady-state level of capital per worker in terms of the saving rate, s, and the depreciation rate, 6, is KIN= (Property format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g. a superscript can be created with the character.) The steady-state level of output per worker in terms of the saving rate, s, and the depreciation rate, 6, is VIN= (Property format your expression using the tools in the palette.) The equation for steady-state consumption per worker in terms of the saving rate, s, and the depreciation rate, 6, is CIN=(Property format your expression using the tools in the palette.)
- Why is a Cobb-Douglas production function useful for analyzing economic growth?= 2. Consider a Solow growth model in which the production function is Yt AK²N₁¹/2, where A = 1. Moreover, assume that the depreciation rate is d = 0.02, the rate of population growth is n = 0.02, and the saving rate is s = = 0.2. a. Compute the value of the capital stock per worker in steady state. b. Draw a graph that represents the steady-state equilibrium of the model. c. Suppose that the capital-labor ration in year t is 90. What will the level of the capital- labor ratio be in year t+1? Will it increase or decrease in future periods? Explain. d. Compute the rate of change of the capital labor ratio between time t and t + 1. How does it compare to the rate of growth of the capital-labor ratio in steady state?Production function is given by Y = Ka(AN)'¯ª, where a=2/3. Initially, the saving rate was equal to s and the economy was in the steady state. Use the Solow growth model to answer the following questions. (Please fill in numbers; use a yomma as a decimal separator: 10,5) 1. In order to increase capital per unit of effective labor in the steady state by a factor of 27 (i.e. to make it 27 times larger), the rate of saving needs to increase by a factor of 2. In order to increase output per unit of effective labor in the steady state by a factor of 4 (i.e. to make it 4 times larger), the rate of saving needs to increase by a factor of 3. Suppose that s=25 percent, the rate of depreciation of capital is equal to 5 percent, the rate of technological progress is equal to 1 percent, and the rate of population growth is equal to 0,25 percent, a=2/3. The steady state level of investment per unit of effective labor is equal to