in the combined romer and solow model - if you increase depreciation - can you graph for me the effects on the balanced growth path and the transition dynamics - i thought in the combined romer and solow model if you are above the balanced growth path the economy will grow slower until it reaches the new lower balanced growth path
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in the combined romer and solow model - if you increase depreciation - can you graph for me the effects on the balanced growth path and the transition dynamics - i thought in the combined romer and solow model if you are above the balanced growth path the economy will grow slower until it reaches the new lower balanced growth path
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- Use the Solow model below to answer the question. Y Y₂ Y₁ K₁ K₂ K3 Y = Af (K, H) dK SY K Suppose that Y₁ is 1,458, Y₂ is 5,898, and Y3 is 11,618. The savings rate for this economy is 18% and the depreciation rate is 5.4%. If this economy is currently at a GDP of 1,458, what is the smallest amount of foreign aid which would move the economy up to a GDP of 11,618? Assume that all foreign aid becomes investment. Round your final answer to two decimal places.3). Let's consider the Solow Model without technology advancement. Y(t)=2K(t)^(1/2)*L(t)^(1/2) The population growth rate=0.02 Capital accumulation is s*Y(t)-d*K s=0.2, d=0.03 d is the capital depreciation rate. In the steady state, please calculate the following measurements. (a)Capital per capita A. 16 В. 24 С. 36 D. 48 Е. 64 F. None of the above (b)Marginal product of capital (Hint: The first derivative of Y with respect to K) А. 1 В. 1/2 С. 1/4 D. 1/8 E. 1/16 F. None of the aboveGood Evening My name is Helen here's the problem A country is described by the solow model, with production function of y=k1/2, Suppose that k is equal to 400. The fraction of output invested is 50%. the depreciation is 5%. Is the country at its steady-state level of output per worker, above the steady state, or below the steady state? Show how you reached your conclusion.
- information regarding Country AAA: Output per capita: y = 3k0.5Depreciation rate: d = 0.10Growth rate of population: n = 0.05Savings function: S = 0.3Y Calculate the capita labor ration (k) and output per capita at the steady-state equilibrium. Say the savings rate in Country AAA has increased to 0.5. Everything else remains the same. Repeat question a) above. Say the population rate has increased to 0.08. Everything else remains the same. Repeat question a) above. hat conclusion can you infer from the answers to question b) and c) above?In class we assumed that the rate of population growth "n" was a constant. This was true for the Solow-Swan growth model as well as for the AK model. Imagine now that the rate of population growth is a function of k. Imagine that n is a DECREASING function of k. Draw the savings and depreciation lines in the Solow-Swan models. In class we showed that, with constant "n" the steady state is unique. Is the steady state necessarily unique if n is a negative function of k? Under what conditions would the steady state still be unique? f. d. е. If there are more than one steady states, what are the stability properties of each of them? Are there "poverty traps"? Can aid permanently change a country's GDP in this case? Please discuss with words. g.3). Let's consider the Solow Model without technology advancement. Y(t)=2K(t)^(1/2)*L(t)^(1/2) The population growth rate=0.02 Capital accumulation is s*Y(t)-d*K_ s=0.2, d=0.03 d is the capital depreciation rate. In the steady state, please calculate the following measurements. (b)Marginal product of capital (Hint: The first derivative of Y with respect to K) А. 1 В. 1/2 С. 1/4 D. 1/8 E. 1/16 F. None of the above
- = 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?Suppose you are given the data for Brazil and Portugal. In Brazil, the saving rate is 0.1 and the depreciation rate is 0.1, while in Portugal the saving rate is 0.2 and the depreciation rate is 0.1. Using the Solow model, you conclude that in the steady state: a. Brazil has a higher capital-output ratio than Portugal b. Portugal has a higher level of output than Brazil c. Portugal has a higher capital-output ratio than Brazil d. Portugal and Brazil have the same capital-output ratio e. Brazil has a higher level of output than PortugalEconomic Growth I – Work It Out Question 1 a. Does this production function have constant returns to Country A and country B both have the production scale? function. yes Y = F(K, L) = KL no b. What is the per-worker production function, y = f(k)? y = 0.5
- Consider a country that is initially in steady state. Suppose the saving rate increases. Moreover, the population growth rate increases by 1% but the capital depreciation rate falls by 1%. According to the Solow–Swan model, the per capita capital stock increases, and the country moves to a new, highersteady state level of per capita income.Answer true, false, or uncertain. Please briefly explain your answerConsider the country of Solow, which is described by the Solow–Swan model. Let the saving rate θ =0.8; let the population growth rate n = 0.05; let the rate of depreciation d = 0.05. If per capita incomey = 100 and the per capita capital stock k = 1000, which of the following is true? a.Replacement investment is 100, saving is 80 and k will increase towards the steady state per capita capitalstock b.Replacement investment is 100, saving is 60 and k will decrease towards the steady state per capita capitalstock c.Replacement investment is 100, saving is 80 and k will decrease towards the steady state per capita capitalstock d.Replacement investment is 100, saving is 80 and k is at the steady state per capita capital stockSuppose a Solow economy is initially at its steady state k∗, and suddenly is hit by a decrease in the depreciation rate δ, from δ to δ1. This change does not alter any of the other exogenous parameters in the model Depict this situation in a graph What happens to steady state level of capital per capita in this situation? What happens to the level of capital per capita over time? Depict this in a graph and explain intuitively.