Question

Could you please answer these two questions?

1- If two economies are identical except for their population
growth rate, then the economy with the higher population growth
rate will have:

A. higher steady-state output per worker.

B. higher steady-state capital per worker.

C. lower steady-state depreciation rates.

D. lower steady-state capital per worker.

2- if the population growth rate decreases in an economy
described by the Solow growth model, the line representing
population growth and depreciation will.

A. Become steeper.

B. Become flatter.

C. Stay the same.

D. Intersect the investment curve at the same point.

Answer #1

**1.Solution**:-.**option
D is correct.**

D. lower steady-state capital per worker.

**Explaination:-**
If two economies are identical except for their population growth
rate, then the economy with the higher population growth rate will
have lower steady-statelevels of capital, output, and consumption
per worker.

**2.Solution:-****option
B is correct.**

B. Become flatter.

**Explaination:-**if the population growth rate
decreases in an economy described by the Solow growth model, the
line representing population growth and depreciation will pivot
clockwise.Decreasing the rate of population growth shifts the line
downward.

The economies of two countries, Thrifty and Profligate, have the
same production functions and depreciation rates. There is no
population growth in either country. The economies of each country
can be described by the Solow growth model. The saving rate in
Thrifty is 0.3. The saving rate in Profligate is 0.05.
(a) Which country will have a higher level of steady-state
output per worker?
(b) Which country will have a higher growth rate of output per
worker in the steady...

QUESTION 1
Suppose an economy can be characterized by a Cobb-Douglas
production function with capital share of 1/3, and A =
200. The investment rate is 0.12 (12%), the annual rate of growth
of the labor force is 0.02 (2%), and the annual depreciation rate
of capital is 0.04 (4%). According to the Solow growth model, this
economy's steady state capital/labor ratio (capital per worker,
k) is
4,000
8,000
10,000
12,000
None of the above.
QUESTION 2
The steady state...

1. If the technology (production function) and all the Solow
model parameters are same for two economies, they will eventually
converge to the same steady state levels of per-capita capital even
if they start at different levels of initial k.
True
False
2. If the technology (production function) and all the Solow
model parameters are same for two economies, more time taken will
be needed to reach steady state for the economy with high initial
level of per-capita capital?
True...

Use information to answer questions below.
Y = f(k) = ka, where a = 0.25
S = 0.3
δ = 0.2
n = 0.05
g= 0.02
a. Find the steady state capital per effective worker, output
per effective worker, investment per effective worker, and
consumption per effective worker.
b. Find the steady state growth rate of capital per worker,
output per worker, investment per worker, and consumption per
worker.
c. Find the steady state growth rate of capital, output,
investment,...

An economy has the following Cobb-Douglas production
function:
Y = Ka(LE)1-a
The economy has a capital share of 1/3, a saving rate of 24
percent, a depreciation rate of 3 percent, a rate of population
growth of 2 percent, and a rate of labor-augmenting technological
change of 1 percent. It is in steady state.
a. Does the economy have more or less capital than at the Golden
Rule steady state? How do you know? To achieve the Golden Rule
steady...

Suppose that two countries are exactly alike in every respect
except that population grows at a faster rate in country A than in
country B. Which country will have the higher level of output per
worker in the steady state? Illustrate graphically.
(a) In which country is the level of steady-state output per
worker larger? Explain.
(b) In which country is the steady-state growth rate of output
per worker larger?
(c) In which country is the growth rate of steady-state...

Answer the following
Y = f(k) = ka, where a = 0.25
S = 0.3
δ = 0.2
n = 0.05
g= 0.02
a. Find the steady state capital per effective worker, output
per effective worker, investment per effective worker, and
consumption per effective worker.
b. Find the steady state growth rate of capital per worker,
output per worker, investment per worker, and consumption per
worker.
c. Find the steady state growth rate of capital, output,
investment, and consumption.
d....

Answer the following questions using the basic Solow growth
model, without population growth or technological progress.
(a) Draw a diagram with per worker output, y, consumption, c,
saving, s and investment, i, on the vertical axis and capital per
worker, k, on the horizontal condition. On this diagram, clearly
indicate steady-state values for c, i, and y. Briefly outline the
condition that holds in the steady- state (i.e. what is the
relationship between investment and the depreciation of
capital?).
(b)...

Assume that an economy is described by the Solow growth model as
below:
Production Function: y=50K^0.4 (LE)^0.6
Depreciation rate: S
Population growth rate: n
Technological growth rate:g
Savings rate: s
a. What is the per effective worker production function?
b. Show that the per effective worker production function
derived in part a above exhibits diminishing marginal returns in
capital per effective worker
C.Solve for the steady state output per effective worker as a
function of s,n,g, and S
d. A...

Use the Solow model to solve. Suppose, you are the chief
economic advisor to a small African country with an aggregate per
capita production function
of y=2k1/2. Population grows at a
rate of 1%. The savings rate is 12%, and the rate of depreciation
is 5%.
(a) On a graph, show the output, break-even investment, and
savings functions for this economy (as a function of capital per
worker). Denote steady-state capital per worker k* and
steady-state output per worker y*. Label...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 4 minutes ago

asked 4 minutes ago

asked 20 minutes ago

asked 24 minutes ago

asked 30 minutes ago

asked 31 minutes ago

asked 33 minutes ago

asked 35 minutes ago

asked 37 minutes ago

asked 43 minutes ago

asked 48 minutes ago

asked 56 minutes ago