I need help with 21 with justification 3. Consider the Solow growth model with the production function, Y = F(K, L) = Ā× K + B × L where Ã >0 and B > 0. Denote k = K/L. Let à denote the depreciation rate and 5 the saving rate. There exists apositive steady state (with k>0):a. AlwaysNeverb.c. If Ā > B.d.If d > šĀ.e. If d < 511. Consider the Solow growth model with aggregate production function F(K, L) = ĀK¹/² L¹/2. Per capita GDPat the steady state is y=Y/L=a. (sÃ/d)².b. (d/sÃ)².c. d/sÃ.20. Consider the Solow growth model where we add government purchases, G. According to the expenditureapproach of GDP, Y=C+I+G. Suppose G = gY, where is a number between 0 and 1. Governmentpurchases are financed with taxes, T = G. Agents invest a fraction 5 of their disposable income, Y-T.Formally, I = 5(Y – T). The steady-state capital per worker, k = K/L, solves:sgf (k)= dkd.s(1 - d)f(k) = gksdf (k) = gke.a.b.a.b.C.C.d.e.š(1 − g)ƒ (k) = dksf (k) = gk21. Consider the Solow growth model where we add government purchases, G. According to the expenditureapproach of GDP, Y=C+I+G. Suppose G = gY, where is a number between 0 and 1. Governmentpurchases are financed with taxes, T = G. Agents invest a fraction 5 of their disposable income, Y-T.Formally, I = 5(Y – T). A permanent increase in the share of government consumption, ā, leads to:An increase in steady-state GDPd. An increase in private consumption but no effect onGDPA decrease in steady-state GDPA decrease in private consumption but noeffect on GDPSA²/d.SÃ/d.e.A decrease in private consumption and an increasein the capital stock

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I need help with 21 with justification

3. Consider the Solow growth model with the production function, Y = F(K, L) = Ā× K + B × L where Ã >
0 and B > 0. Denote k = K/L. Let à denote the depreciation rate and 5 the saving rate. There exists a
positive steady state (with k>0):
a. Always
Never
b.
c. If Ā > B.
d.
If d > šĀ.
e. If d < 5
11. Consider the Solow growth model with aggregate production function F(K, L) = ĀK¹/² L¹/2. Per capita GDP
at the steady state is y=Y/L=
a. (sÃ/d)².
b. (d/sÃ)².
c. d/sÃ.
20. Consider the Solow growth model where we add government purchases, G. According to the expenditure
approach of GDP, Y=C+I+G. Suppose G = gY, where is a number between 0 and 1. Government
purchases are financed with taxes, T = G. Agents invest a fraction 5 of their disposable income, Y-T.
Formally, I = 5(Y – T). The steady-state capital per worker, k = K/L, solves:
sgf (k)= dk
d.
s(1 - d)f(k) = gk
sdf (k) = gk
e.
a.
b.
a.
b.
C.
C.
d.
e.
š(1 − g)ƒ (k) = dk
sf (k) = gk
21. Consider the Solow growth model where we add government purchases, G. According to the expenditure
approach of GDP, Y=C+I+G. Suppose G = gY, where is a number between 0 and 1. Government
purchases are financed with taxes, T = G. Agents invest a fraction 5 of their disposable income, Y-T.
Formally, I = 5(Y – T). A permanent increase in the share of government consumption, ā, leads to:
An increase in steady-state GDP
d. An increase in private consumption but no effect on
GDP
A decrease in steady-state GDP
A decrease in private consumption but no
effect on GDP
SA²/d.
SÃ/d.
e.
A decrease in private consumption and an increase
in the capital stock

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21) The exogenous growth modelling economic model, often known as the Solow–Swan model, is a model that forecasts the long-term expansion of the economy. In an effort to provide an explanation for long-run economic growth, it investigates issues such as the accumulation of capital, the expansion of labor or population, and advances in productivity that are primarily driven by the advancement of technical innovation.

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