Please correct answer and don't used hand raiting Consider an economy described by the Solow model with technological progress, and suppose that at some point thecapital depreciation rate increases. As a result, there will beQuestion Answera.An increase in the growth rate of consumption per effective worker in the long-run;b.The answer depends on whether the saving rate is above or below the golden rule;C.An increase in the steady-state level of output per effective worker;d.A fall in the steady-state level of output per effective worker;

The Solow model analyzes economic growth. A higher capital depreciation rate means capital stock…

Answered: Consider an economy described by the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

2
If climate change impacts (e.g., increased heat waves, droughts, wildfires, etc.) decrease the economy's technology level A, then, through the lens of the Solow growth model (and assuming the economy was originally in a steady-state), holding all else constant, we would expect it to: O A. Decrease steady-state capital, decrease steady-state output, uncertain impact on steady-state consumption O B. Increase steady-state capital, increase steady-state output, uncertain impact on steady-state consumption OC. No impact on steady-state capital, decrease steady-state output, decrease steady-state consumption O D. Decrease steady-state capital, decrease steady-state output, decrease steady-state consumption If households are worried about climate change and this concern increases their savings rate, then holding all else constant (including A, so focusing only on the change in savings rates), we would expect it to: O A. Increase steady-state capital, increase steady-state output, decrease…
In the Solow growth model without population growth and technological progress, how can the steady state of an economy be described? (i) Total capital stock and total output are growing steadily over time. (ii) The change in capital stock per worker is zero. (iii) The level of investment per capita is equal to the depreciation of capital per person. O a. (i), (ii), and (iii) O b. Only (ii) and (iii) O c. Only (i) and (ii) O d. Only (i) and (iii)
None
In the Solow growth model without population growth and technological progress, which of the following statements is/are always true in the steady state when the saving rate increases? (i) Output per worker increases. (ii) Consumption per worker increases. (iii) Capital per worker increases. O a. (i), (ii), and (iii) are always true. O b. O c. O d. None of the statements is always true. Only (i) and (ii) are always true. Only (i) and (iii) are always true.
1. Using the solow growth model, given y(K) = k^0.4, S=0.20, depreciation rate=0.04 and n=1%, a. What is the steady-state level of capital per worker? b. What is the steady-state of output per worker? c. What is the steady-state level of consumption per worker? 2. Now assume population growth is instead-0.5% (approximately the growth rate when every couple has 1.7 children), but that all other parameters stay the same. a. What is the new steady-state output per worker? Is it higher or lower than with faster population growth? [A numerical answer and a 1 sentence response is fine.] b. What is the new steady- state of consumption per worker? Is it higher or lower than with faster population growth? [A numerical answer and 1 sentence response is fine].
Now, in the Solow Model STEADY STATE of ANY ECONOMY that has positive rates of capital depreciation (10%), labor force growth (3%), and rise in worker effectiveness (2%), what is the rate of growth of: a. real GDP (Y) b. real GDP per worker (Y/L) c. real GDP per effective worker (Y/L*E)?
Suppose that the depreciation rate increases. In the Solow growth model, determine the effects of this on the quantity of capital per worker and on output per worker in the steady state. Explain the economic intuition behind your results.
QUESTION 22 whereas in the Solow model In the Romer model, the balanced growth path is equal to OAG-A; the steady-state level of capital is zero OB.0; infinity ; the growth rate declines as economy approaches the steady state O D. the level of the number researchers in an economy; capital is scarce OE. g=lL: there is a steady state G H. K. V. M Control Alt 無要換 Alt
In the Solow growth model without population growth and technological progress, consumption per worker will be maximized in the steady state when: (1) Output per worker is maximized. (ii) Investment per worker is maximized. (iii) The marginal product of capital equals the depreciation rate. O a. (i), (ii), and (ii) O b. Only (iii) O c. Only (ii) Od. Only (1)
Consider the Solow growth model with labor growth and no technology growth, i.e., n = 0, x = 0. Output is created by a Cobb-Douglas produc- n0,x tion function combining Labor, Lt, and capital, Kt, such that output, Y+is given by Y₁ = A+ KL Yt 1-a For a given time t, Given a level of Capital, and Investment, It, and a depreciation rate of capital, 8, the level of capital at time t+1 is given by the following law of motion of capital K++1 = Kt - 8Kt + It The labor growth rate in this economy is n = 2%, depreciation is 8 = 4%, the savings rate is s = 25%, and a = 0.3. Initial levels of capital, labor and technology are Ko = 10, Lo = 5, Ao = 1 respectively. The economy is assumed to be closed with no government spending. What is the value for capital per worker at time t = 1? (a) 2.22 (b) 2.57 (c)1.78 (d) 1.82
Please answer fast please help

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS