Answered: In the one country model of…

In the one country model of technological growth, if A = 2, L = 100, and the fraction of worker in R&D, (gamma) y = 0.2, output per capita for this country is А. 1.2 В. 1.4 С. 1.6 D. 1.8

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

6
A country that has the production function below, which depends on capital and labor. Describe per-capita production" y" as a function of the per- capita capital stock "k". Show the level of capital on the steady state (k*). Show that the steady state output per- capita (y*) Y = 100K ^ (1)/(3) L^(2)/(3)
In a Solow economy with technological progress, the production function is given by: Y = KO.5(LE)0.5. Furthermore, the saving rate of this economy is 0.2. The population growth rate is 0.03. The depreciation rate is 0.01. The technological progress is given by g which is equal to 0.01. Define y = Y/LE and k = K/LE. a) Find out the steady state values of k (i.e.: k*) and y (i.e.: y"). 2. Ay Ak AY ΔΚ b) Find out the values of and in the steady state. K y'k'Y
A Solow Growth Economy with production function Y=K¹/²(AL)¹/² has a savings rate of 24 percent, a depreciation rate of 2 percent, labour force growth of 1 percent and technological progress improving at 3 percent per year. Provide a labelled diagram to illustrate and quantify the determination of equilibrium output per effective worker and capital per effective worker.
If the current capital stock per person in South Korea is greater than the current capital stock per person in China and total factor productivity is the same in both countries, according to the Solow model: O a. China initially will grow slower than South Korea, but each will have the same steady state Ob. China initially will grow faster than South Korea, but each will have the same steady state О с. Both South Korea and China initially will grow at the same rate and have the same steady state O d. China initially will grow faster than South Korea and will have a lower steady state О . China initially will grow faster than South Korea and will have a higher steady state
Suppose we started out at the steady state capital stock in the basic Solow growth model (see graph a few questions ago). If there subsequently were an increase in the demand for loanable funds due to more favorable tax treatment of business investment, ceteris paribus (i.e., holding other factors constant, including no shift in the supply of loanable funds), then as we move to the new steady state over time we would expect to see Group of answer choices A) economic growth rates turn negative as we move toward the new steady state and the nation’s capital stock to decrease from its current level. B) economic growth rates turn positive as we move toward the new steady state and the nation’s capital stock to decrease from its current level. C) economic growth rates turn positive as we move toward the new steady state and the nation’s capital stock to grow from its current level. D) economic growth rates turn negative as we move toward the new steady state and the nation’s…
Consider a standard Solow growth model. Denote capital stock as K, population as N, capital depreciation rate as d, saving rate as s, output as Y. Output is produced by a representative firm according to the production function Y=zF(K, N), where z is current total factor productivity. The law motion for capital is K' = (1 - d)K + I, where K' is the future capital stock. Population grows at a constant rate n, that is N' = (1 + n)N, and household supply labor inelastically, so population equals labor force. (a) In a graph, show the steady state level of capital per worker. Use lower case letters to denote per-capita terms and use * to denote steady state.(b) Suppose a country is initially at a steady state, then a war destroyed some of its capital stock. Determine the long run effects on the quantity of capital per worker and on output per worker in the steady state. Show by a graph. (C)Define golden rule saving rate. What does it maximize? Determine the effects of a decrease in the…
Consider an economy described by the Solow model with the following production function: Y = F(K, L) = K“ (L)'-« L grows at the rate n, the depreciation rate is 8, and the country saves a constant fraction s of its income. The change in capital per-worker is given by Ak = sy – (n+ 8)k. (a) Derive the per-worker production function. (b) Assuming population growth equals n and the depreciation rate equals 8, find the steady state level of capital per worker. It will depend on a, s, n and 8. Imagine the economy begins at the steady state you found in part b. Then there is a war that destroys a substantial amount of the economy's capital. The war does not affect the size of the labor force, population growth, the depreciation rate, or the saving rate. c) What is the immediate effect of the war on output per worker? Explain. d) After the war, is the growth rate of output per worker higher or lower than it was in steady state? Explain. e) How does the war affect steady state output per…
Consider a numerical example using the Solow Growth Model, for 2 countries. Country A: d=0.1, s=0.3, n=0.01, z=1, F(K,L)=K0.3n0.7 Country B: d=0.1, s=0.2, n=0.01, z=1.5, F(K,L)=K0.4N0.6 Which Country has a higher level of GDP per capita in steady state? O Country A O Country B Not enough information
Capital per person in France is about 81 percent of the U.S. level and per capita income is about 79 percent of the U.S. level. Given that per capita income y = Ak0.3, calculate the level of total factor productivity (A), relative to the U.S. level, that would be needed for France to match the U.S. level of per capita income. Round your answer to 2 decimal places.
Why Capital does not Flow from Rich to Emerging Countries? We assume that the production function in country i is 1 1 2 Yi = A ² k², (1) where y, and ki are output and capital per capita, respectively, in country i, and A is a measure of technology in country i. (a) Calculate the marginal product of capital (MPK) denoted by Ri in country i. (b) Express the MPK in terms of output per capita, yi, i.e., eliminate ki from Ri by using the production function (1). (c) We consider two countries, indexed by i 1 and i 2, whose production function is described by (1). Both are assumed to have the same level of productivity, i.e., A₁ A2. We assume y2 50y₁. Calculate the ratio R₁/R₂. (d) We keep assuming that y2 50y1, but now we assume that A2 educational attainment is higher in country 2. Calculate the ratio R₁/R₂ under 10A₁ because these assumptions. FX = - (e) We keep assuming y2 50y₁ but now we consider that technology in country 1 is a function of technology of the more advanced country 2,…
9. Suppose there is no population or technological growth. Define k as the capital-to-labor ratio. If the per worker production function is given by y = ¹/2, the saving ratio is 0.3, and the depreciation rate is 0.1, then the steady state capital per worker ratio is (a) 1 (b) 2 (c) 4 (d) 6 9