Production function is given by Y = 3K"(AN)!-a,where a=2/3. The rate of depreciation of capital is equal to12 percent, the rate of technological progress is equal to 5percent, and the rate of population growth is equal to 3percent. The economy was in the steady state at time t andthe level of technology was equal to A:=30. Use the Solowgrowth model to answer the following questions.(Please fill in numbers; use a comma as a decimal separator:10,5)1. If the saving rate s=40 percent, the steady state levelof output per unit of effective labor at time t is equalto2. If the saving rate s=40 percent, the steady state levelof consumption per unit of effective labor at time t isequal to3. If the saving rate s=40 percent, the steady state levelof consumption per worker at time t is equal to

A production function gives the technological relation between quantities of physical inputs and…

Production function is given by Y = 3Kª(AN)-a, where a=2/3. The rate of depreciation of capital is equal to 12 percent, the rate of technological progress is equal to 5 percent, and the rate of population growth is equal to 3 percent. The economy was in the steady state at timet and the level of technology was equal to A=30. Use the Solow growth model to answer the following questions.

Production function is given by Y = 3Kª(AN)-a, where a=2/3. The rate of depreciation of capital is equal to 12 percent, the rate of technological progress is equal to 5 percent, and the rate of population growth is equal to 3 percent. The economy was in the steady state at timet and the level of technology was equal to A=30. Use the Solow growth model to answer the following questions.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Production function is given by Y = 3K"(AN)!-a,
where a=2/3. The rate of depreciation of capital is equal to
12 percent, the rate of technological progress is equal to 5
percent, and the rate of population growth is equal to 3
percent. The economy was in the steady state at time t and
the level of technology was equal to A:=30. Use the Solow
growth model to answer the following questions.
(Please fill in numbers; use a comma as a decimal separator:
10,5)
1. If the saving rate s=40 percent, the steady state level
of output per unit of effective labor at time t is equal
to
2. If the saving rate s=40 percent, the steady state level
of consumption per unit of effective labor at time t is
equal to
3. If the saving rate s=40 percent, the steady state level
of consumption per worker at time t is equal to

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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
3). Let's consider the Solow Model without technology advancement. Y(t)=2K(t)^(1/2)*L(t)^(1/2) The population growth rate=0.02 Capital accumulation is s*Y(t)-d*K s=0.2, d=0.03 d is the capital depreciation rate. In the steady state, please calculate the following measurements. (a)Capital per capita A. 16 В. 24 С. 36 D. 48 Е. 64 F. None of the above (b)Marginal product of capital (Hint: The first derivative of Y with respect to K) А. 1 В. 1/2 С. 1/4 D. 1/8 E. 1/16 F. None of the above
= 2. Consider a Solow growth model in which the production function is Yt AK²N₁¹/2, where A = 1. Moreover, assume that the depreciation rate is d = 0.02, the rate of population growth is n = 0.02, and the saving rate is s = = 0.2. a. Compute the value of the capital stock per worker in steady state. b. Draw a graph that represents the steady-state equilibrium of the model. c. Suppose that the capital-labor ration in year t is 90. What will the level of the capital- labor ratio be in year t+1? Will it increase or decrease in future periods? Explain. d. Compute the rate of change of the capital labor ratio between time t and t + 1. How does it compare to the rate of growth of the capital-labor ratio in steady state?
Consider the following Solow diagram, indicating two sep-arate savings rates, 0.2 and 0.4: Suppose the savings rate is 0.2. At the steady state, what is capital per worker? What is output per worker? How much is saved per worker? Suppose the population growth rate is equal to the depreciationrate. Solve for n and d.
Question 27 Consider countries A and B, with A having a higher population growth rate than B. According to the Solow-Swan model, output per person in A and output per person in B are the same in steady state. Answer True or False. Remember to include your explanation.