1. Solow review Recall that in equilibrium, the "birth and death of capital lines" cross so that: (nd)k=sy = ska a) Use some algebra to solve for equilibrium value of k. b) Compare this to r-code for k[t] in the loop of the function. What if any differences to do you see? c) Let a = .3, d = .1, and s = .25. What will be the ratio of steady state capital per person with a population growth rate of 0.25% to that of a population with growth rate 0.5%? (These is roughly in line with the difference between the two scenarios for 2010 to 2060.) Is this much of a difference? (1 sentence is fine.)

1. Solow review Recall that in equilibrium, the "birth and death of capital lines" cross so that: (nd)k=sy = ska a) Use some algebra to solve for equilibrium value of k. b) Compare this to r-code for k[t] in the loop of the function. What if any differences to do you see? c) Let a = .3, d = .1, and s = .25. What will be the ratio of steady state capital per person with a population growth rate of 0.25% to that of a population with growth rate 0.5%? (These is roughly in line with the difference between the two scenarios for 2010 to 2060.) Is this much of a difference? (1 sentence is fine.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1. Solow review
Recall that in equilibrium, the "birth and death of capital lines" cross so that:
(n + d)k = sy = sk°
a) Use some algebra to solve for equilibrium value of k.
b) Compare this to r-code for k[t] in the loop of the function. What if any differences to do
you see?
c) Let a = .3, d = .1, and s = .25. What will be the ratio of steady state capital per
person with a population growth rate of 0.25% to that of a population with growth rate
0.5%? (These is roughly in line with the difference between the two scenarios for 2010 to
2060.) Is this much of a difference? (1 sentence is fine.)

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Step 1: Define Solow Mdel

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Step 2: Determine equilibrium value of k

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Step 3: Compare with r-code

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Step 4: Analyze the Ratio of Steady State Capital

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