Consider the "Cobb-Douglas" production function given by Y = AK L where A is a positive constant. Suppose that the capital stock grows at 2% per year and the labour force grows at 1% per year. According to the production function, what will output growth be approximately? 1% per year 2% per year 3% per year 4% per year

Consider the "Cobb-Douglas" production function given by Y = AK L where A is a positive constant. Suppose that the capital stock grows at 2% per year and the labour force grows at 1% per year. According to the production function, what will output growth be approximately? 1% per year 2% per year 3% per year 4% per year

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Production And Growth

Section17.1: Economic Growth Around The World

Problem 1QQ

See similar textbooks

Similar questions

Question 2Assume production function is given by:Y= K(1/2) L(1/2)a. Write the production function in per worker terms (y=f(k))b. Assume that the per worker level of capital in the steady state is 4, the depreciation rate is 5% per year, and population growth is 5% per year. Does this economy have “too much” or “too little” capital? How do you know? [Show your work].
Turkish growth performance in 1980’s Explain why in the period of 2014-2018 the TFP contribution to GDP growth diminished to 0.8 percentage points the lowest scored observed in Turkish economic history while Log K is at 7.2%, a very high growth score?
At an annual growth rate of 3.5% it will take approximately years for a country's GDP to double. Over the next 60 years, how many times will GDP double, assuming the growth rate does not change? If GDP starts at a value of $10 million, then in 60 years the value of GDP will be $ million. In 60 years the value of GDP will be times larger than it is today. ASUS
If an economy annual real GDP growth rate reduces from 8.2 percentage, its real GDP doubling time will.......... A) reduce by 3.53 year B) increase by 8.4 year C) reduce by 9.3 year D) increase by 18.5 year
Assume that the per-worker production function is yt = 2kt^(0.3). The saving, depreciation and population growth rates are estimated at 0.3, 0.05 and 0.02, respectively. (a) Calculate the capital-labour ratio steady state for this economy. (b) Calculate consumption per worker at the steady state.
J 7 Given a production function Yt = AKt1 /3L2 /3 , if K0=8, A = 2, L = 4, s = 0.2, and d = 0.05: (a) Calculate the steady-state level of capital and output. (b) Calculate K1 , I 1 , Y1 and C1 .
If the growth rate of real GDP rises from 3% to 4% per year, then the number of years required todouble real GDP will decrease from (please explain how to do this)
Y=√KVAN, where K is capital, N is labor, A is the state of technology, and AN denotes the amount of effective labor in the economy. Suppose that the saving rate, s, is equal to 18%, and that the rate of depreciation, 8, is equal to 12%. Suppose further that the number of workers, gn, grows at 6% per year and that the rate of technological progress, 9A, is 4% per year. Given the values of the economy, compute the following: The steady-state value of the capital stock per effective worker is. (Round your response to two decimal places.) The steady-state value of output per effective worker is. (Round your response to two decimal places.) The steady-state value of the growth rate of output per effective worker is%. (Enter your response as an integer.) The steady-state value of the growth rate of output per worker is%. (Enter your response as an integer.) The steady-state value of the growth rate of output is%. (Enter your response as an integer.) Suppose that the rate of technological…
Explain why in the period of 2014-2018 the TFP contribution to GDP growth diminished to 0.8 percentage points the lowest scored observed in Turkish economic history while Log K is at 7.2%, a very high growth score?
You are asked to perform a growth accounting analysis for Ethiopia to inform policy makers. Output growth in Ethiopia was 5% per year during the period 2012- 2022. Employment growth was 3% per year and capital was growing by 10% in the same period. Suppose that the capital share in income is 0.3 and that there are constant returns to scale. c) What was the annual growth rate of output per worker? Of capital per worker? d) What was the growth in total factor productivity (technical progress)?
You know that it takes approximately 20 years for nominal GDP per capita to increase by 40% in Country A. Over the same period, accumulated inflation is 15%. What is the average annual growth rate (g) of real GDP per capita in this country over these 20 years?
If real GDP in Country A amounted to $1.62 trillion in 2019 and $1.71 trillion in 2018, the real GDP growth rate in this country in 2019 is: A) 5.26% B) 5.56% C) 2.47% D) -5.26% E) -5.56%