Recent data shows that the agingpopulation in many Asian economies isgetting larger in their demographicstructure. According to the life-cycle theoryof saving, people save during their workingage and dissave when they are retired;consequently, given that the workingpopulation is shrinking, a researcher worriesthat the national saving rate in many Asianeconomies most likely would decrease inthe foreseeable future. Discuss theimplication of the above-mentioned issueto economic growth under the frameworkof the Solow growth model.

Given, The aging population in many Asian economies is getting larger in demographic structure.…

Answered: Recent data shows that the aging…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2 1 5. Suppose the production function for an economy is given by F(K, A, L) = AK L5. If A = 2 and the savings rate is given by s = capital per worker is equal to 10? %3D .25, what is the consumption per worker when a. 2.32 b. 9.28 с. 3.48 (-0,3)y d. 6.96 6. Suppose that an economy with no population growth is at a level of capital per worker ko, such that sf (ko) ko b. k, < ko c. k = ko d. Unknown/Impossible to tell %3D
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.
Suppose the government must increase taxes in order to increase spending. Now assume Congress wants to increase spending on education without decreasing spending somewhere else. For each variable state if it will INCREASE, DECREASE or REMAIN UNCHANGED. In at least one complete sentence state WHY this change will occur. Be specific. Private Saving (Sp): Consumption: (C) Government Saving (Sg) Total Saving: (S) Real Interest Rates: (r) Investment: (I)
The diagram below shows alternate paths for two hypothetical economies, each starting with GDP of $1 billion. Assume that Area 1 is equal to Area 2. Real Consumption FIGURE 25-1 Area 1 Year X Aren 2 Time Year Y Economy B 2% growth Economy A 1% growth h Refer to Figure 25-1. Suppose Economy A jumps to the path of Economy B at Year 0 by increasing the share of GDP that is saved. In that case, which of the following statements about Economy A is true? O a. By jumping to a new growth path at Year 0, Economy A has increased the share of national income that is consumed. O b. By Year Y, the increase in consumption made possible by the economy's higher growth rate approximately equals the consumption sacrificed in earlier years. Oc By Year X, Economy A is saving and investing the same share of its national income as it would have been had it stayed on its original path Od. Economy A will not be able to regain the losses in consumption it incurs by jumping to the path of Economy B Oe. By Year…
In 2017, the population in the US was estimated at 325.1 million. The population in 2018 was estimated to be 326.8 million. Assuming that the population growth is compounding annually at a constant growth rate, calculate the growth rate from year 1 to year 2. Source: United States Census Bureau 0.45 % 5.2 % 4.5 % 0.52%
Use the following table to find the steady-state values of the capital-labor ratio and output if the per-worker production 03 function is y=2k S Saving rate 8 Depreciation rate n Population growth rate A Technology 0.35 0.02 0.06 2 k* = Steady-state capital-labor ratio = y*= Steady-state output = (Round your responses to two decimal places.) CHILD Output, Investment, and Depreciation Capital-Labor Ratio Output Depreciation Investment After plotting the final point of your multipoint curve, press the Esc key on your keyboard to end the line Q
A mathematical approximation called t he rule of 70 tells us that the number of years that it will take something that is growing to double in size is approximately equal to the number 70 divided by its percentage rate of growth. Thus, if Mexico’s real GDP per person is growing at 7 percent per year, it will take about 10 years (= 70 / 7) to double. Apply the rule of 70 to solve the following problem. Real GDP per person in Mexico in 2005 was about $11,000 per person, while it was about $44,000 per person in the United States. If real GDP per person in Mexico grows at the rate of 5 percent per year, about how long will it take Mexico’s real GDP per person to reach the level that the United States was at in 2005? (Hint: How many times would Mexico’s 2005 real GDP per person have to double to reach the United States’ 2005 real GDP per person?)
rates of saving mean rates of productivity growth. Multiple Cholce Lower, lower Higher, lower Lower higher
Ecuador's economy has a production function that is as follows: Y = K2/5L3/5 The men in Ecuador generally stay home performing household chores while women work. Since the Ecuadorian state television stopped airing soap operas, many men decided to join the workforce and thus the labor force increased by 6.5%. However, recent storms have destroyed much of the capital stock of the country and thus the capital stock shrank by 2.5%. A. Assuming there is no change in total factor productivity in Ecuador, how would the output of Ecuador's economy change? B. How would labor productivity (output per worker) be affected by the increase in labor and decrease in capital stock? Explain. C. Assuming instead that Ecuador's economy grew by 4.9%, what would be the change in total factor productivity in the economy?
16 True or False? The key difference between the Solow and production/expenditure models of the economy is that the Solow model endogenizes the saving rate.
Small differences in growth rates in the size of the economy, over several decades, will result in big differences in the size of the economy. Pretend we start in 1950 and the U.S. growth in real GDP has been around 3.15%. This has resulted in real GDP growing 8 times over this 70-year period (1950 to 2020). If real GDP growth had been 4.0%, real GDP would be times larger. a. 8 (about the same growth as with 3.15% growth) b. 10 С. 14 d. 16
1. The country Egalia has the following production function: Y = 500K^0.25L^0.75, where K denotes the amount of capital and L the amount of labor (which coincides with that of the population size). The number 500 in the production function indicates total factor productivity.

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Recent data shows that the aging population in many Asian economies is getting larger in their demographic structure. According to the life-cycle theory of saving, people save during their working age and dissave when they are retired; consequently, given that the working