define each term/concept then indicate how they relate to each other and/or how they both relate to specific challenges in economic development Capital flight and the basic transfer (in terms of is the exchange of capital flow between a country’s international borrowing system, given the basic transfer equation: BT = dD - rD = (d - r) D)
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define each term/concept then indicate how they relate to each other and/or how they both relate to specific challenges in economic development
Capital flight and the basic transfer (in terms of is the exchange of capital flow between a country’s international borrowing system, given the basic transfer equation: BT = dD - rD = (d - r) D)
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- (b) Discuss how changes in local real interest rates and foreign interest rates impact the decision to carry out investment by (i) foreigners and (ii) locals.4.If population growth rate is 0.03, and the depreciation rate is 0.2, then in order to maintain the steady state capital-labor ratio equal to the amount found in Qs. 2, what would be the investment per worker?Gross domestic capital formation is always greater than gross fixed capital formation is this true?
- We consider a developing economy during two successive relatively short periods (5 years for example). During the first period according to national account statistics GDP average growth rate is computed as 7% and employment average growth rate as 3%. A growth accounting analysis estimated the capital stock growth as 10 %. in the second period those average growth rates are for GDP 3%, for employment 2% and for capital stock 4%. Calculate the contributions of TFP to GDP growth in both periods as well as the contributions of the capital stock and labour growth rates in each period. Alpha=0.4 lüp1 1 1. Assume that a country's production function is Y = K2L2. Assume there is no population growth or technological change What is labor productivity computed from the per-worker production function? Is this value the same as labor productivity computed from the original production function а. b. Assume that 10 percent of capital depreciates each year. What gross saving rate is necessary 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 rate multiplied by per-worker output must equal the depreciation rate multiplied by the capital-labor ratio.)1. A country has the per-worker production function: Yt = 6k/3 where y, is output per worker and k, is the capital-labor ratio. The depreciation rate is 0.1 and the population growth rate is 0.1. The saving function is S; = 0.1Y, where S, is total national saving and Y, is total output. a) What is the steady-state value of capital-labor ratio? b) What is the steady-state value of output per worker? c) What is the steady-state value of consumption per worker? Answer: 2. What happens in the steady state to the capital-labor ratio, output per worker, and consumption per worker when each of the following events occur? You should assume that the steady-state capital-labor ratio is below the Golden Rule level. k y a) Productivity falls b) Population growth falls c) The saving rate falls d) The depreciation rate falls
- Using Harrod-Domar Growth Model If a net savings rate is equal to 5% and a capital-output ratio is equal to 2, calculate the predicted GDP growth rate (show complete solution).What are the major steps taken by government of Oman towards the economic diversification? Discuss?What is gross capital formation reflecting in terms of GDP of a country? What it indicates when the value is high or low?
- Assume that the per-worker production function is yt = 2kt^(0.3). The saving, depreciation and population growth rates are estimated at 0.3, 0.05 and 0.02, respectively. (a) Calculate the capital-labour ratio steady state for this economy. (b) Calculate consumption per worker at the steady state.1 1 1. Assume that a country's production function is Y = K2L2. Assume there is no population growth or technological change = f(k)? b. Assume that 10 percent of capital depreciates each year. What gross saving rate is necessary to What is the per-worker production function y а. 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 rate multiplied by per-worker output must equal the depreciation rate multiplied by the capital-labor ratio.) (Ctrl) -Why do large differences in capital per worker lead to relatively small differences in predicted GDP across countries? Workers exert more effort when they have less capital Capital has a high depreciation rate 4 O The exponent on capital in the production function is much lower than one O Capital is not an input in production