I need help with the questions and please prove justification. 5. In the Solow growth model, defining s as the savings rate, Y, as output, and C₁ as consumption, invest-ment, It, is given by:A. It = (1-5)B. It = sytC. It (15) CtD. ItsYt - CtE. It = (1-5)Yt6. Consider the Solow growth model where the production function is Cobb-Douglas with Ã as the totalfactor productivity and a as the capital share. The steady-state capital stock per worker is:A. (SÃ/d) ¹-aB. (5A/d)¹+aC. (SÃ/d) ¹-aD. (SĀ/d)¹-aE. (sÃ/d)7. In the textbook Solow growth model, an increase in the savings rateper worker,steady-state output per worker, andA. Reduces; Reduces; ReducesB. Raises; Raises; RaisesC. Raises; Reduces; ReducesD. Reduces; Raises; RaisesE. Raises; Raises; Can raise or lowerthe steady-state capital stocksteady-state consumption per worker.

ANSWER: (5). Solution- In solow model, s¯ = saving rate Yt = Output Ct = consumption…

Answered: . In the Solow growth model, defining s…

. In the Solow growth model, defining s as the savings rate, Y, as output, and Ct as consumption, invest- ment, It, is given by:

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Question

I need help with the questions and please prove justification.

5. In the Solow growth model, defining s as the savings rate, Y, as output, and C₁ as consumption, invest-
ment, It, is given by:
A. It = (1-5)
B. It = syt
C. It (15) Ct
D. ItsYt - Ct
E. It = (1-5)Yt
6. Consider the Solow growth model where the production function is Cobb-Douglas with Ã as the total
factor productivity and a as the capital share. The steady-state capital stock per worker is:
A. (SÃ/d) ¹-a
B. (5A/d)¹+a
C. (SÃ/d) ¹-a
D. (SĀ/d)¹-a
E. (sÃ/d)
7. In the textbook Solow growth model, an increase in the savings rate
per worker,
steady-state output per worker, and
A. Reduces; Reduces; Reduces
B. Raises; Raises; Raises
C. Raises; Reduces; Reduces
D. Reduces; Raises; Raises
E. Raises; Raises; Can raise or lower
the steady-state capital stock
steady-state consumption per worker.

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