2. Suppose the economy's production function is Y = AK^O.3N^O.7. If K=2000, N = 100, and A = 1, then Y=246. If K and N both rise by 20%, and A is unchanged, by how much does Y increase?
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Q2. Suppose the economy's production function is Y = AK^O.3N^O.7. If K=2000, N = 100, and A = 1, then Y=246. If K and N both rise by 20%, and A is unchanged, by how much does Y increase?
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- Suppose the economy's production function is Y = AK0.3N0.7. If K = 2000, N = 100 and A=1 then Y = 246. If K and N both rise by 20% and A is unchanged, by how much does Y increase?Assume that digital revolution popularizes the use of artificial intelligence (computers) in the workplace. The production function becomes: Y = 0.25 K(2/5)(ACN)(3/5) where C stands for the number of computers.: a) Use growth accounting to predict the increase in total output in response to an increase in the number of computers by 10 percent. b) The nominal interest rate on government bonds equals 9 percent and inflation equals percent. The rate of GDP growth is equal to the result obtained in (a). Use the debt dynamics equation and graph to explain whether or not the level of public debt in percent of GDP can be stabilized if the government runs a primary deficit. c) Use the neoclassical investment model (equation and graphs) to assess the impact of a decrease in the number of computers on investment (in traditional physical capital K).Consider an economy that produces two goods, an agricultural good and a manufacturing good. An amount YA of the agricultural good can be produced using the following equation: YA = LA where LA is the amount of labor used in this sector. An amount of YM of the manufacturing good can be produced using the following equation: YM = KθLM 1-θ where K is capital stock and LM is the amount of labor used in such sector. So, this economy’s total output (i.e. GDP) is: Y = YA + YM. This economy has zero population growth rate (i.e. n = 0) and the depreciation rate is δ. The total number of workers in the economy is L and of course, L = LM + LA. Let P = LA/L. Furthermore, define: y = Y/L, k = K/L and c = C/L. As usual, we have: ∆k = sy – (δ+n)k. Please use the above information to derive the key equation for this version of Solow model. Show the steady state of the economy is a diagram with k as the x-axes. Label k* , y* and c* in your diagram.
- Assume an economy has a production function that is NOT a Cobb-Douglas production function. Specifically, the economy's production function is Y= AK and in the current period A = 5. Given A=5, the relationship between capital, K, and output (Y) is the following: K, capital True False 0 1 2 3 4 5 Y, output when A=5 0 5 10 15 20 25 From the table above, we know the economy's production function, Y-AK, is an increasing production function with respect to capital.Suppose a country has a population of 120 people, a working-age population of 100 people, its labor force participation rate is 0.5 (50%), and the quantity of output is 60 units. Suppose that the production function of the economy is given by Y=2N, where Y represents the quantity of output and N represents the number of workers needed to produce the output. I know the answer is 0.4 but I don't understand how to get it. Thank you!Suppose that the aggregate production function takes the form y= A(5ON -0.1N), where Y is output, A is productivity, and N is total hours worked. Let's suppose A-1.0. Assuming that the supply of labor is given by ys = 100 + 10w where w is the wage rate. What is the equilibrium level of output and hours worked? (Hint: use the labor market equilibirum condition to find w) OA N-150, Y-2,350 OB. N-200, Y-6000 OC N-200, Y-5,000 OD. N-50, Y-3,750
- With lockdowns currently imposed across Europe and North America until mid-April, even in the best-case scenario it will take at least until mid-June for market confidence to be restored in these economies. The implication is that nearly six million workers in Bangladesh’s formal sector – which is largely manufacturing – will be without steady work for an extended period.” a) Which part of the production function do you think the issue mentioned above will affect? Draw two diagrams to show Real GDP and LRAS is affected in the long run. The government should also consider an unconditional cash transfer program for an initial period of three months at a rate of $95 per month, which corresponds to the minimum wage for the formal sector in Bangladesh. This would cost the government roughly $14 billion, or 4% of GDP. While this sort of cash transfer program always suffers from targeting issues, Bangladesh enjoys a highly sophisticated mobile financial services network, which could…Suppose you are given the aggregate production function for an economy and the amount of available technology increases for this economy. If labor and capital constant are held constant, increase in technology will causes labor productivity to decrease. True FalseWhich is an example of the aggregate production function, Y = F(K, N), that exhibits constant returns to scale? Y= 2 K N Y = 3 K N Y = K/N Y= 2K + 3 N
- A country has a Cobb-Douglas production function given by: Y = AK0.5H0.1 If total factor productivity is 46, human capital is 1,828, and the capital stock is 2,736, what will this country's GDP be? Do not round until your final answer, when you may round to two decimal places. Country A produces GDP according to the following equation: GDP 5K and has a capital = stock of 13,399. If the country devotes 13% of its GDP to producing or repairing investment goods, how much is this country currently investing? Rounds your answer to two decimal places.Suppose the economy's production function is Y=AK0.3N0.7. If K = 2000, N = 100. Calculate the output level of the economy.Q4
