In the Solow growth model with population growth, if the per-worker productionfunction is given by y = √k, the saving rate is 0. 3, the depreciation rate is0. 1, and the population growth rate n is 0.05, then the steady-state capital stockper worker (*) is:a) 6Ob) 4O c) 5d) 2 In the Solow growth model without population growth, when f(k) is drawn on agraph with increases in k noted along the horizontal axis, the slope of the curve f(k)denotes:a) the marginal product of labour.Ob) the marginal product of capital.c) output per worker.d) output per unit of capital.

According to the Solow model, once physical capital has increased to the point where depreciation…

In the Solow growth model with population growth, if the per-worker production function is given by y = √√k, the saving rate is 0. 3, the depreciation rate is 0. 1, and the population growth rate n is 0.05, then the steady-state capital stock per worker (k*) is: O a) 6 b) 4 O c) 5 d) 2

In the Solow growth model with population growth, if the per-worker production function is given by y = √√k, the saving rate is 0. 3, the depreciation rate is 0. 1, and the population growth rate n is 0.05, then the steady-state capital stock per worker (k*) is: O a) 6 b) 4 O c) 5 d) 2

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider an economy that exhibits both population growth (L grows at rate n) and technological progress (A grows at rate a) described by the production function, Y = F(K,AL) = Kª(AL)¹-α| Here K is capital and Y is output. (a) Show that this production function exhibits constant returns to scale. What is the per-effective-worker production function? (c) Find expressions for the steady-state capital-output ratio, capital stock per effective worker, and output per effective worker, as a function of the saving rate (s), the depreciation rate (8), the population growth rate (n), the rate of technological progress (a), and the coefficient a. (You may assume the condition that capital per effective worker evolves according to Ak = sf (k) − (a +n+8)k.) (d) Show that at the Golden Rule steady state the saving rate for this economy is equal to the parameter a.
1) The depreciation rate of capital in the US is 8 = 0.043 and the population growth rate is g₁ = 0.007. Moreover, Y/K is around 0.35 on average over the last 60 years in the US (see the graph below). If the saving rate is s = 0.2 in the US, then find the long-run growth rate of average income in the US according to the Solow's model. (Note: To cross-check Compare your theoretical result with the actual growth rate of average income in the US which is 2%.) 0,43 0,41 0,39 0,37 0,35 0,33 0,31 0,29 0,27 0,25 1950 1953 1956 1959 1962 1965 Y/K in the US 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010
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
Let 0 be the saving rate, n the population growth rate and d the depreciation rate. Which of the following conditions is consistent with steady state in the Solow-Swan model? Y = 0K K = (n + d)Y O OY/L = (n+ d)K/L о өК — (п +d)Y
In this problem, we distinguish between labor and population in the Solow growth model. A proportion of the population, a, between zero and one, works. The production function is now written as Y = A(K^1/3)[(aL)^2/3] (a) How does an increase in a from 0.3 to 0.6 change steady state GDP? (b) Does it change the steady-state capital? Explain. (c) Suppose a rises steadily over time. How do you think would affect the growth rate of GDP?
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Suppose that the per hour worked form of the production function for an economy is given by y = 10k03 The depreciation rate is 11%, the saving rate is 21%, and the growth rate of labor hours is 7%. The steady-state capital-labor ratio for this economy is (Round your response to two decimal places.)
W (2 bookr Suppose that the depreciation rate increases. In the Solow growth model, determine the effects of this on the quantity of capital per worker and on output per worker in the steady state. Explain the economic intuition behind your results.
Consider a Solow-Swan model with saving rate s - 0.4, labour force growth g, - 0.05. constant productivity A = 1, and depreciation = 0.05. If output per worker is y = Y/L = 200 and capital per worker is k = K/L = 800, which of the following is true? O Efective depreciation per worker is 60, saving per worker is 80 and k will decrease towards the steady state Effective depreciation per worker is 80, saving per worker is 80 and k is at the steady state O Efective depreciation per worker is 60, saving per worker is 80 and k will increase towards the steady state O Effective depreciation per worker is 80, saving per worker is 60 and k will decrease towards the steady state
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You are given the production function Y= AK H14 N 2, where A = 4. The population growth rate n is 0.025, the depreciation rate d is 0.075 (both physical and human capital depreciate at the same rate), and the growth rate of autonomous factors is zero. Investment 1 is the sum of two components, investment in physical capital Ig and investment in human capital Iµ. The fraction of GDP that goes to physical capital investment is SK = 0.05 and the fraction of GDP that goes to human capital investment is SH = 0.05. (i) Convert the production function to a function relating Y/N to both K/N and H/N. (ii) Find the steady-state physical capital-labor ratio and the steady - state human capital - labor ratio. (iii) Find the steady – state per person output. 2.
The convergence to a steady-state capital-labour ratio k* is ensured by the fact that if k is at a level Multiple Choice lower than k*, saving will exceed the investment required to maintain constant k, causing k to rise lower than k*, investment will exceed saving, leading to an increase in the capital stock lower than k*, saving will exceed the investment required to maintain a constant k, causing output per capita to decline higher than k*, the rate of depreciation will be higher than the savings rate, causing k to decrease higher than K*, output per capita will continue to increase until a new steady-state equilibrium is reached