Question

Suppose capital's share in output is 0.3 and labor's share is 0.7: A. What would be...

Suppose capital's share in output is 0.3 and labor's share is 0.7:

A. What would be the effect on output if the capital stock increases by 10 percent (assuming labor is constant)?

B. What would be the effect of increasing labor by 10 percent (assuming capital is constant)?

C. If the increase in labor in part B is due to population growth of 10%, what would happen to per capita output?

D. What would be the effect on per capita output in part B if the increase in labor were due to an increase in the labor force participation rate (say women enter the labor force) with the population constant?

E. Suppose output is rising 4% per year. If capital grew by 3% and labor grew by 1%, what would the growth rate of multifactor productivity be? What would be the growth in labor productivity? F. Suppose output is rising 3% per year. If both labor and capital grow by 1 percent each, what would the growth rate of multifactor productivity be? What would be the growth in labor productivity?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
2) •Real GDP grew at 3.3% per year •Capital’s share of income has averaged about 1/3...
2) •Real GDP grew at 3.3% per year •Capital’s share of income has averaged about 1/3 in the United States. •The capital stock grew at 3.3% per year. •The labor force grew at 1.7% per year. The increase in real GDP per capita in the United States from 1949 to 2010 A) was due to increased labor productivity. B) was due to an increase in the hours worked per person. C) was due to both increased in labor productivity and...
Suppose an economy described by the Solow model is in a steady state with population growth...
Suppose an economy described by the Solow model is in a steady state with population growth n of 1.8 percent per year and techno- logical progress g of 1.8 percent per year.Total output and total capital grow at 3.6 percent per year. Suppose further that the capital share of output is 1/3. If you used the growth- accounting equation to divide output growth into three sources—capital, labor, and total factor productivity—how much would you attribute to each source?
Suppose the share of GDP that goes to capital is 0.30 while the share that goes...
Suppose the share of GDP that goes to capital is 0.30 while the share that goes to labour is 0.70. Total factor productivity grows at a rate of 1.5 percent per year, population grows at a rate of 1.1 percent per year and total output grows at a rate of 4.3 percent per year. What is the rate of capital per worker?
If the share of GDP used for capital goods is 0.02, the growth rate of productivity...
If the share of GDP used for capital goods is 0.02, the growth rate of productivity is 0, the growth rate of population is 0.03, the depreciation rate is 0.02, the initial capital/output ratio is 1.67, and the elasticity of GDP with respect to capital is 0.3, then what is the growth rate of the GDP per capita? Use three decimal places.
Suppose the economy's real interest rate is reduced. What initial effect would this have? Suppose there...
Suppose the economy's real interest rate is reduced. What initial effect would this have? Suppose there is a major increase in federal spending for health care (with no increase in taxes). What initial effect would this have? Suppose personal income taxes are reduced by 10% (with no change in government spending). What initial effect would this have? Suppose labor productivity increases (with no change in nominal wages). What initial effect would this have? Suppose nominal wages increase by 12% (with...
Question 51 pts The very poorest LDCs have relatively low rates of economic growth and relatively...
Question 51 pts The very poorest LDCs have relatively low rates of economic growth and relatively high rates of population growth. high rates of economic growth and relatively low rates of population growth. low rates of both population growth and economic growth. high rates of both population growth and economic growth. Flag this Question Question 61 pts Capital is rising at 2% per year while the quantity of labor rises at 3% per year. Solow would predict: there will be...
(Hybrid Harrod-Domar-Solow Model) An economy has a population of 2 million, the current capital stock of...
(Hybrid Harrod-Domar-Solow Model) An economy has a population of 2 million, the current capital stock of $6 billion, and a current GDP of $3 billion. The savings rate is a constant 8% and depreciation rate is 3%. The population growth rate is 0. Its production function is given by Yt=AtKt, where Yt denotes GDP, Kt denotes capital stock and At denotes productivity of capital in year t. Capital productivity will remain at its current level until the economy achieves a...
Use the Solow-Swan model to explain what would happen to steady state capital per effective worker...
Use the Solow-Swan model to explain what would happen to steady state capital per effective worker resulting from: a. A decrease in the population growth rate. b. An increase in labor productivity. c. An increase in the investment share of GDP.
3- Growth Model Suppose that the output (Y) in the economy is given by the following...
3- Growth Model Suppose that the output (Y) in the economy is given by the following aggregate production function. Yt = Kt +Nt where the Kt is capital and Nt is population. Furthermore assume that the capital depreciate at the rate of ẟ and That saving constant and proportion s of income you may assume that ẟ>s 1-suppose that the population remains constant . solve for the steady state level of capital per worker 2- now suppose that the population...
1. For the following, assuming that there is no population growth or technological progress. a) What...
1. For the following, assuming that there is no population growth or technological progress. a) What is the equation that defines the steady-state level of capital per worker? b) How would you determine the steady state level or output per worker (i.e., real GDP per capita) from (a). c) Explain, in words, how an economy that starts with too much capita per worker gets to its steady state. 2. Many demographers predict that the United States will have zero annual...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT