Consider that Country X is operating along its balanced growth path and producing a composite commodity (Y). Commodity Y is a production function of factor inputs capital (K), labor (N), as well as the given state of technology (A) of the following form. Y= K• AN For a particular year, the level of capital (K) was 1,000 and the level of effective labor (AN) was 1,250. In the same year, the saving rate was 15%, the depreciation applicable on capital was 12%, and the number of workers grew by 2%. If Country X wants to continue along its growth path, the required rate of technological progress it needs to achieve is%. (Round your response to two decimal places.) If the country's aim was to keep its capital stock constant, without considering the effects of a growing work force in the economy, will be the investment towards capital required by Country X. Suppose the growth rate of the number of workers falls by 30%, but the rate of technological progress remains unchanged. What is the effect on the growth rate of output and the standard of living of the workers? O A. The growth rate of output and the standard of living of the workers fall by 30% each. O B. The growth rates of output and the standard of living remain unchanged. OC. The growth rate of output falls by 12.58% and the change in standard of living is unaffected. O D. The growth rate of output falls by 12.58% and the standard of living falls 30%.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
Consider that Country X is operating along its balanced growth path and producing a composite commodity (Y). Commodity Y is a production function of factor
inputs capital (K)., labor (N), as well as the given state of technology (A) of the following form.
Y= K• AN
For a particular year, the level of capital (K) was 1,000 and the level of effective labor (AN) was 1,250. In the same year, the saving rate was 15%, the depreciation
applicable on capital was 12%, and the number of workers grew by 2%.
If Country X wants to continue along its growth path, the required rate of technological progress it needs to achieve is %.
(Round your response to two decimal places.)
If the country's aim was to keep its capital stock constant, without considering the effects of a growing work force in the economy,
will be the investment
towards capital required by Country X.
Suppose the growth rate of the number of workers falls by 30%, but the rate of technological progress remains unchanged. What is the effect on the growth rate of
output and the standard of living of the workers?
O A. The growth rate of output and the standard of living of the workers fall by 30% each.
O B. The growth rates of output and the standard of living remain unchanged.
O C. The growth rate of output falls by 12.58% and the change in standard of living is unaffected.
O D. The growth rate of output falls by 12.58% and the standard of living falls 30%.
Transcribed Image Text:Consider that Country X is operating along its balanced growth path and producing a composite commodity (Y). Commodity Y is a production function of factor inputs capital (K)., labor (N), as well as the given state of technology (A) of the following form. Y= K• AN For a particular year, the level of capital (K) was 1,000 and the level of effective labor (AN) was 1,250. In the same year, the saving rate was 15%, the depreciation applicable on capital was 12%, and the number of workers grew by 2%. If Country X wants to continue along its growth path, the required rate of technological progress it needs to achieve is %. (Round your response to two decimal places.) If the country's aim was to keep its capital stock constant, without considering the effects of a growing work force in the economy, will be the investment towards capital required by Country X. Suppose the growth rate of the number of workers falls by 30%, but the rate of technological progress remains unchanged. What is the effect on the growth rate of output and the standard of living of the workers? O A. The growth rate of output and the standard of living of the workers fall by 30% each. O B. The growth rates of output and the standard of living remain unchanged. O C. The growth rate of output falls by 12.58% and the change in standard of living is unaffected. O D. The growth rate of output falls by 12.58% and the standard of living falls 30%.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Productivity
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
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)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
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-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education