Due to climate change, from 2011 onward, every year the island is hit by hurricanes of increasing force that destroy capital. As a result, the depreciation rate doubles. What will be the new long-run (steady state) value for income per worker (Y/L)? Pick the closest value. Also label the new steady-state GDP as point C in the diagram. None of the other options Between 75 and 85 Between 4,500 and 5,200 Between 8,000 and 8,500 Between 44 and 49

MATLAB: An Introduction with Applications
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Author:Amos Gilat
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Chapter1: Starting With Matlab
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Due to climate change, from 2011 onward, every year the island is hit by
hurricanes of increasing force that destroy capital. As a result, the depreciation
rate doubles. What will be the new long-run (steady state) value for income per
worker (Y/L)? Pick the closest value. Also label the new steady-state GDP as point
C in the diagram.
None of the other options
Between 75 and 85
Between 4,500 and 5,200
Between 8,000 and 8,500
Between 44 and 49
Transcribed Image Text:Due to climate change, from 2011 onward, every year the island is hit by hurricanes of increasing force that destroy capital. As a result, the depreciation rate doubles. What will be the new long-run (steady state) value for income per worker (Y/L)? Pick the closest value. Also label the new steady-state GDP as point C in the diagram. None of the other options Between 75 and 85 Between 4,500 and 5,200 Between 8,000 and 8,500 Between 44 and 49
Problem 2
Suppose the economy of an island behaves as the Solow model (Y=AK1/2L1/2), version 1.0 (constant
population). Suppose that the productivity parameter is A=90, the depreciation rate is d=1/10, the savings
(investment) rate is s=0.10, and the labor force is equal to 2 million (and constant over time).
Transcribed Image Text:Problem 2 Suppose the economy of an island behaves as the Solow model (Y=AK1/2L1/2), version 1.0 (constant population). Suppose that the productivity parameter is A=90, the depreciation rate is d=1/10, the savings (investment) rate is s=0.10, and the labor force is equal to 2 million (and constant over time).
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