ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337408059
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 18, Problem 2P
To determine
Indication of given Lorenz curve.
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3. Consider the case of everyone being wealthier in the future, such as from a positive
productivity shock (computers, internet, robotics, AI).
A. Begin from the baseline preferences and endowments.
Give both people an endowment of 1000 pounds for the first period and 1100 pounds for the
second. AI increases the supply of second period goods by 10%.
Note that there is now a total of 2000 pounds in the first period and 2200 pounds in the
second.
Determine the equilibrium interest rate.
r =
%
B. Begin from the baseline preferences and endowments.
Give both people an endowment of 1100 pounds for the first and 1100 pounds for the second
periods. AI increases the supply in all periods by 10%.
Note that there are now 2200 pounds in the first period and 2200 pounds in the second.
Determine the equilibrium interest rate.
r =
%
C. Explain how productivity and the real rate are connected.
Write at least five sentences.
Not use ai please
Not use ai please
Chapter 18 Solutions
ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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