6 4) In the Solow model, suppose that Y AK0.5 N0.5, N grows at 2% per year,A=1, the depreciation rate d-D0.1 and s-0.2 What is the growth rate of outputin the long run?a) 1%b) 0.5%c) 2%d) output stays at a steady state forever%3D

Growth rate of output per effective labour:- y^*t=YtAtNt=sδ+g+nα1-α where:- s=savings δ=depreciation…

4) In the Solow model, suppose that Y = AK0.5 N0.5, N grows at 2% per year, A=1, the depreciation rate d-0.1 and s-0.2 What is the growth rate of output in the long run? a) 1% b) 0.5% c) 2% d) output stays at a steady state forever %3D

4) In the Solow model, suppose that Y = AK0.5 N0.5, N grows at 2% per year, A=1, the depreciation rate d-0.1 and s-0.2 What is the growth rate of output in the long run? a) 1% b) 0.5% c) 2% d) output stays at a steady state forever %3D

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

100%

4) In the Solow model, suppose that Y AK0.5 N0.5, N grows at 2% per year,
A=1, the depreciation rate d-D0.1 and s-0.2 What is the growth rate of output
in the long run?
a) 1%
b) 0.5%
c) 2%
d) output stays at a steady state forever
%3D

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