Suppose y = k1/2, total factor productivity is constant and equal to 1, s = 0.40, and d = 0.10. When the economy reaches the steady state, real GDP per worker is ________. A. $2 B. $4 C. $8 D. $16
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- Suppose k = y^1/2, total factor productivity is constant and equal to 1, s = 0.40, and d = 0.10. When the economy reaches the steady state, investment per worker is ________. A.$0.80 B.$1.60 C.$3.20 D.6.40Farmland is a developing country with the following production function:Y = 24L2/3K1/3with Y = Output levelL = Quantity of laborK = Quantity of machinesa. Find the real rate of return for labor. Show your calculation. b. Suppose Farmland is granted some extra machines for production.How would this affect the real rate of return for labor? Explain by using theresult in (a).If there is a sharp increase in the number of workers, holding all other things constant, which of the following is likely in the short term? a) increase real GDP per person but decrease real GDPb) raise real GDP but decrease real GDP per personc) raise both real GDP and real GDP per persond) decrease both real GDP and real GDP per person
- Consider an economy with a Cobb-Douglas production function. Assume that the labour income share parameter is 1/3. The economy is producing 100 units of output and the productivity parameter is equal to 1. f the depreciation rate for capital is 6%, investment rate is 6%, and there are 125 workers in the economy. The growth rate in the economy: Select one: a. is positive because the economy is below its steady state. b. is equal to zero because the economy is at its steady state. C. is negative because the economy is above its steady state. d. cannot be determined.5.2 Consider the following economy: FYI: for this production function.() = A Parameter Value Investment rate (0) 3% Depreciation rate (8) 5% Population growth (9₁) 2% Productivity level (A) 25 Productivity Growth (ga) 4% Currently, the economy has a labour force of 5,000 and a capital stock equal to 15,000. 5.2.1 Calculate this country's current rate of economic growth. 5.2.2 How fast will country grow annually once its steady state is reached? 12 Y = AK3L3Holding all factors of production constant except for labor, what happens in an economy when real GDP output increases? The unemployment rate falls and in employment rate increases. The level of technology increases as the economy expands. The level of capital increases as the economy expands. All of the answers are correct.
- if output is measured as growing at 5 percent during a given business cycle, and input grew at 2 percent over that same time period, then overall labor productivity growth is said to be ?a) Consider an economy in which the labour force grows by 2.7 percent per annum, while the capital stock grows by 4 percent per annum. Suppose 55 percent of national income goes to labour and 45 percent to capital. i. If the residual were R = 0, what rate of growth would the economy achieve? Calculate the value of the residual (R) if the country's actual rate of growth has been 4.5 percent ii. per annum. b) Suppose that a developing economy can be modeled with the Solow growth model. The constant returns to scale production technology is: Y(t) = K(t)“ H(1)* (A(t)L(t))* Where Y(t) is output, K(t) is physical capital, H(t) is human capital, A(t) is the level of technology, and L(t) is labour. The parameters a, º and A are positive and there is perfect competition in the markets for output and the inputs. Assume that during the 2005-2018 period, the country's growth rate averaged 8.5 percent and a recent growth-accounting study showed that the residual accounted for only 1.2 percent of…1. Assume individual's utility flow function takes form: u(c) = log(c), and the production function takes form: Y(t) = AK(t) + BL(t). Describe the physical capital accumnlation equation and obtain the GDP growth rate in the following economy: (a) RCK economy (b) OLG economy
- Suppose that Indonesia's national production function is Y = K 05L 05, where K is the amount of land and Lis the amount of labor. The economy starts when the amount of land owned is 100 units and the number of workers is 100 units. Calculate the following indicators. a. How much output is produced? b. What are the labor wages and land rent? c. What is the share of the output received by labor? d. If a natural disaster occurs that causes the population to be reduced by half, what is the new level of national output? e. What are the new rates of labor wages and land rent? f. What share of output does the labor receive now?An increase in total factor productivity: a.) can lead to an inflationary gap. b.) causes an increase in the sustainable growth rate. c.) is reflected in an increase in output for a given level of productivity.Classify each of the following as a movement along or a shift of the production function and provide a justification for your choice. (i) An increase in the number of machines used in production (ii) An increase in the population growth rate (iii) A new technological innovation (iv) The government invests in a new entrepreneurship training program (v) The government implements major reforms to make it easier to transact business solutions fpr 3,4 and 5