1) if the share of GDP used for capital goods is 0.33, the
growth rate of...
1) if the share of GDP used for capital goods is 0.33, the
growth rate of productivity is 0.04, the growth rate of population
is 0, the depreciation rate is 0.04, the initial capital/output
ratio is 3.23, and the elasticity of GDP with respect to capital is
0.1, then what is the steady state value of the capital/output
ratio? Use 2 decimal places.
2) If the share of GDP used for capital goods is 0.17, the
growth rate of productivity...
Internal rate of return. For each of the projects shown in the
following table, calculate the...
Internal rate of return. For each of the projects shown in the
following table, calculate the internal rate of return (IRR). Then
indicate, for each project, the maximum cost of capital that the
firm could have and still find the IRR acceptable.
Project A
Project B
Project C
Project D
Initial investment
-$90,000
-$490,000
-$20,000
-$240,000
Year
Cash inflows
1
$20,000
$150,000
$7,500
$120,000
2
25,000
150,000
7,500
100,000
3
30,000
150,000
7,500
80,000
4
35,000
150,000
7,500
60,000
5...
Assume that an economy is described by the Solow growth model as
below:
Production Function: y=50K^0.4...
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...
Suppose the growth rate of the money supply is 3 percent, the
growth rate of velocity...
Suppose the growth rate of the money supply is 3 percent, the
growth rate of velocity is 4 percent, and the growth rate of real
aggregate output is 2 percent. According to the equation of
exchange, the inflation rate would be _____ percent
Select one:
a. 7
b. 6
c. 5
d. 4
e. 3
Use the following information to answer the question(s)
below:
(1) the rate of depreciation is 10%...
Use the following information to answer the question(s)
below:
(1) the rate of depreciation is 10% per year,
(2) the population growth rate is 2% per year, and
(3) the growth rate of technology is 3% per year.
a. Refer to the information above. Which of the following equals
the annual growth rate of "effective labor" in the steady state in
this economy?
A) 2%
B) 3%
C) 5%
D) 10%
E) 15%
b. Refer to the information above. Which...