Question

Say that the economy is in steady state. Assume now that the
government implements an important educational program that makes
college more accessible to the population. As a result,
productivity in the economy increases. The other parameters in the
economy remain constant. Comparing the new steady state with the
original steady state, you can claim that

investment per worker and consumption per worker have
fallen

None of the above

investment per worker has fallen, but consumption per worker
has risen

investment per worker and consumption per worker have
risen

investment per worker has risen, but consumption per worker
has fallen

Answer #1

2)let take ,

Y=A*K^0.5*L^0.5

Y/L=A*(K/L)^0.5

y=A*k^0.5. { y is Income per worker and k is capital per worker.

Iet say saving rate is s.

Investment per worker=s* y=s*(A*k^0.5)

consumption per worker=(1-s)y=(1-s)*(A*k^0.5)

Both Investment per worker and consumption per worker is positively related to A.,so

Increase in productivity will increase value of A.

So output per worker Increase ,so saving per worker and thus Investment per worker will increase.

As income per worker Increase so consumption per worker Increase.

Option A is right

Assume the economy has achieved the balanced growth steady
state. Explain what factors determine the rates of growth of each
of the following variables when balanced growth is achieved: output
per effective worker, capital per effective worker, output per
worker, output, and consumption per worker.

Suppose an economy is initially in a steady state with capital
per worker below the Golden Rule level. If the saving rate
increases to a rate consistent with the Golden Rule, then in the
transition to the new steady state consumption per worker will:
a. always exceed the initial level.
b. first rise above then fall below the initial level.
c. always be lower than the initial level.
d. first fall below then rise above the initial level.

Our closed economy starts off in steady state. Suppose it is
suddenly hit with an outbreak mad bat disease. This disease is
caught by a large percentage of the population and unfortunately
some people die. Another result there is a permanent decline in
fertility rates (as described by the number of children born per
adult female) and a permanent increase in government spending on
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Using one Solow model diagram and words...

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...

Create an excel program that describes how the economy moves to
the steady state given the following values: savings rate = 0.3,
depreciation rate (δ) = 0.1, A=1, and the initial capital labor
ratio (k) = 4. Use the Cobb-Douglas production function Y =
AL1/2K1/2 or y = k0.5
a) Show graphically the movement to the steady state and explain
intuitively the behavior of the series.
b) Suppose the savings rate increases to 0.4. Recalculate the
movement to the steady...

A closed economy (NX = 0) without government (G = T = 0) has a
production function Y = K^1/4 ^L 3/4 . Capital depreciates at a
rate of 3 percent per year. Workers spend 76 percent of their
income each year. Investment adds up to the capital stock which is
available for production next year. Assume that capital per worker
is 5.0625 at the beginning of 2017 and the number of workers stays
the same each year.
(a) Find...

Question #1: The Basic Solow Model
Consider an economy in which the population grows at the rate of
1% per year. The per worker production function is y = k6, where y
is output per worker and k is capital per worker. The depreciation
rate of capital is 14% per year. Assume that households consume 90%
of their income and save the remaining 10% of their income.
(a) Calculate the following steady-state values of
(i) capital per worker
(ii) output...

I need just answer!
1.
Suppose Noah has an individual labour supply curve that is
upward-sloping. Which of the following increases would Noah respond
to, and how?
Select one:
a. the wage, by enjoying more leisure
b. the wage, by working more hours per week
c. the opportunity cost of leisure, by working fewer hours per
week
d. the opportunity cost of leisure, by taking vacations without
pay
2.
Which of the following does the neoclassical theory of
labour predict...

answer the following questions
Q21.When the economy experiences an
expansion, it is most likely the case
that-------------------------------
GDP is increasing, unemployment is increasing, and inflation is
decreasing.
GDP is increasing, unemployment is decreasing, and inflation is
increasing.
GDP is decreasing, unemployment is decreasing, and inflation is
increasing.
GDP is decreasing, unemployment is decreasing, and inflation is
decreasing.
Q22. GDP is an important economic measurement because
it
provides valuable data on unemployment rates
measures the combined total of all intermediate and...

1. The amount of __________increases when the economy
goes into a recession and decreases when the economy goes into an
expansion.
a. structural unemployment
b. seasonal unemployment
c. cyclical unemployment
d. frictional unemployment
2. It is difficult for cyclically unemployed persons to
find jobs because
a. they typically do not meet the qualifications required for
the available jobs.
b. the economy is in a recession.
c. they voluntarily quit their last jobs and employers may view
them as unreliable.
d....

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