**Investment in Country A**In the educational example provided, Country A produces its Gross Domestic Product (GDP) according to the specific equation: \[ \text{GDP} = 5\sqrt{K} \]where $\sqrt{K}$ represents the square root of the capital stock. Given data:- Current capital stock, $K$, is 13,399.- The country allocates 13% of its GDP to producing or repairing investment goods.### Problem:Calculate the amount of investment Country A is currently making, and round the answer to two decimal places.### Steps to Solve:1. **Calculate GDP:** \[ \text{GDP} = 5\sqrt{K} \] Substitute $K = 13,399$: \[ \sqrt{13,399} \approx 115.74 \] Then, \[ \text{GDP} = 5 \times 115.74 \approx 578.70 \]2. **Determine the amount devoted to investment:** The country invests 13% of its GDP in producing or repairing investment goods. \[ \text{Investment} = 0.13 \times \text{GDP} \] Substituting the calculated GDP: \[ \text{Investment} = 0.13 \times 578.70 \approx 75.23 \]### Conclusion:Therefore, Country A is currently investing approximately **75.23** units in producing or repairing investment goods. This calculated figure is rounded to two decimal places as required.

Gross domestic product is the sum of the market values of all the goods and services produced…

Country A produces GDP according to the following equation: GDP = 5√K and has a capital stock of 13,399. If the country devotes 13% of its GDP to producing or repairing investment goods, how much is this country currently investing? Rounds your answer to two decimal places.

Country A produces GDP according to the following equation: GDP = 5√K and has a capital stock of 13,399. If the country devotes 13% of its GDP to producing or repairing investment goods, how much is this country currently investing? Rounds your answer to two decimal places.

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

a. Some data at first might seem puzzling: The share of GDP devoted to investment was similar for Country liberty and Country Techno from 1970 - 2001. However, during these same years Country Techno had a 6 percent growth rate of average annual income per person, while Country liberty had only a 2 percent growth rate. If the saving rates were the same, why were the growth rates so different?
For an open economy, which of the following expressions represents private saving (S)? Group of answer choices investment plus tax revenues less government expenditure plus net exports, I + TG + NX I+T G NX I + G + NX GT+NXI none of the above
When one person saves more, that person’s wealth is increased, meaning that he or she can consume more in the future. But when everyone saves more, everyone’s income falls, meaning that everyone must consume less today. Explain this seeming contradiction.
Q8. Assume a closed economy. Suppose the capital-output ratio is 3, the depreciation rate is 3%, and the gross savings rate is 10%. Use the Harrod-Domar growth equation to determine the rate of growth in total output. What would the gross savings rate have to be to achieve 5% growth? Why is capital the only factor of production in the Harrod-Domar model? Compare the assumptions made about the production function in the Solow model and the Harrdo-Domar model.
or An economy is currently at it's steady state. Their depreciation rate is 6% and their capital stock is 1,830. What will be their level of investment? Do not round until your final answer, when you may round to two decimal places. Country A produces GDP according to the following equation: GDP = 5√K and has a capital stock of 10,351. If the country devotes 11% of its GDP to producing or repairing investment goods, how much is this country currently investing? Rounds your answer to two decimal places.
The Economist article, "Low interest rates leave savers with few good options", states that savers are likely to respond to low rates in one of the following three ways: Lincrease athletic activity, go back to school, or, spend more on entertainment O re-watch the movie Trading Places, invest in Treasury bills, or, move to Germany save more and spend less, set aside less money due to higher returns, or, decrease investments in risky assets save less and spend more, set aside more money to make up for low returns, or, increase investments in risky assets
In 2018, India was the world’s seventh largest economy, with a $2.69 trillion GDP (as measured in U.S. dollars). India was also one of the world’s fastest-growing economies, with an annual growth rate of real GDP of 7.3%. a. If the country maintains the same growth rate, how many years will it take for India’s GDP to double? b. Bangladesh’s GDP was $286.27 billion, but its growth rate was equal to India’s. How many years will it take for Bangladesh’s economy to double? c. Although Bangladesh and India have the same annual growth rate, their economies are much different in size. How can you explain the size difference to someone who is unfamiliar with scaling large numbers? Which strategies would you use?
An economy consumes 1 million chickens each year. A new technology in raising chickens lowers the price of each chicken from $50 to $40. Suppose the economy still consumes 1 million chickens each year at the lower price. Do you agree that since the consumers pay $10 million less, the national saving due to the change in price equals $10 million?
Small differences in the rate of economic growth can lead to large differences in living standards. Consider two countries: Fritolaysia and Khandibar. Currently, real GDP per person (average income) is $60,000 in Fritolaysia and $20,000 in Khandibar. Suppose you want to project what the real GDP per person will be in each country 100 years from now. The following formula shows how to compute the average income in n years, where g represents the growth rate of real GDP per person (in decimal form-that is, 1.5% is entered as 0.015): Average Income in n Years Current Average Income x (1 + g)" Use the growth formula to find the correct amounts to select to fill in the following table. Growth Rate Average Income after 100 Years (Percent) (Dollars) 1.5 1.7 4 4.2 1 1.5% 1.7% Suppose Fritolaysia is expected to grow at 1.7% for the next 100 years. Which of the following growth rates in Khandibar would cause the average income in Khandibar to exceed the average income in Fritolaysia in 100…
Suppose a country has a real GDP per capita of $68,000 and grows at a constant rate for the next 36 years. How much larger (in percentage terms) is this country if its growth rate is 4.33% instead of 3.13% after 36 years of growth? Answer this as a percentage and round your answer to two digits after the decimal without the percentage sign. ex. If you found the rate to be 5.125%, answer 5.13.
Suppose there is an increase in the saving rate. We know that this will cause an increase in which of the following in the steady state? growth rate of output level of output growth rate of capital per worker growth rate of output per effective worker none of the above
The Solow model is an important formal model of economic growth. Assume that the production function is Y = F(K,N) = zK° N¹-a, where 0 < a < 1. Production is constant returns to scale. We use lowercase to denote variables in per capita terms.