[Use a diagram to answer these questions] Be sure to label the: a. axes; b. curves; c. initial steady-state levels; d. terminal steady-state levels; e. the direction curves. shift. Suppose a government is able to impose controls that limit the number of children people can have. Use the Solow growth model to graphically illustrate the impact of the slower rate of population growth on the steady-state capital-labor ratio and the steady-state level of output per worker.

[Use a diagram to answer these questions] Be sure to label the: a. axes; b. curves; c. initial steady-state levels; d. terminal steady-state levels; e. the direction curves. shift. Suppose a government is able to impose controls that limit the number of children people can have. Use the Solow growth model to graphically illustrate the impact of the slower rate of population growth on the steady-state capital-labor ratio and the steady-state level of output per worker.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Japan is experiencing a decrease in population and increase in technology. Under which condition Japan will experience economic growth (increase in output per labor)? Analyze using the Solow growth model. Show your answers graphically. Describe using maximum 3 sentences.
In the Solow growth model with population growth and technological progress, the growth rate of capital per effective worker is and the growth of output per worker is_ a. Positive, positive b. Zero, positive c. Zero, zero O d. Positive, zero
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1. Outline the basic features of Solow model with Human capital. Explain why Human capital is a key variable of many endogenous growth models?
In the period of 1950-1973 the GDP average growth rate reached 9.3 % in Japan and approximately 4 % in USA. How this huge difference may be explained? Your arguments must be based on the growth theory and on the levels of GDP per capita both in Japan and USA in 1950 shown in the Madison table.
6. Consider the Solow model discussed in class. Consider a population growth rate increase from n to n'. Show graphically what happens to capital per worker (k) and output per worker (y).
“Economic growth doesn’t simply depend on having more natural resources, more or higher-quality labor, more capital and so on; it depends on people’s incentives to put these resources together to produce goods and services” Do you agree or disagree? Why? Explain.
What are the implication of economic growth that relate with Solow growth and Endogenous growth?
Can you show me the solution for part d)
Use the Solow model with exogenous growth to answer the following.Q 3.1: Following a reduction in the population growth rate, output per worker growth permanently increases. True or False Q 3.2: Following a reduction in the population growth rate, output per worker growth permanently increases. True or False Q 3.3: The only way to increase the long-run growth rate of output per worker is to increase the growth rate of labor efficiency. True or False Q 3.4: Following a decrease in TFP, output per worker growth temporarily declines. True or False
1. Many endogenous growth models feature so called scale effects: per capita growth rises when population growth rises. Some economists have criticized these models for this reason, since countries with faster population growth do not in general appear to also experience faster per capita income growth. Consider an economy that has access to a production technology Y = AKª L¹-a where Y is output, A is the level of technology, K is capital and L is the amount of labor in the economy. Capital evolves according to K = SY (thus, the depreciation rate 6 = 0). The population growth rate is n. (Throughout, gx, where x can be any of the variables in the model). i. Assume that technology is determined by A =BK What sort of endogenous growth model is this? Find gk in terms of the K, L, and other parameters of the model. ii. Write an expression for gy in terms of gk and g₁. What must be true for a balanced growth path to exist in this model? Solve for the balanced growth path value of gy and gy,…
Now, in the Solow Model STEADY STATE of ANY ECONOMY that has positive rates of capital depreciation (10%), labor force growth (3%), and rise in worker effectiveness (2%), what is the rate of growth of: a. real GDP (Y) b. real GDP per worker (Y/L) c. real GDP per effective worker (Y/L*E)?