Principles of Macroeconomics (12th Edition)
Principles of Macroeconomics (12th Edition)
12th Edition
ISBN: 9780134078809
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 19.A, Problem 1P

Subpart (a):

To determine

To show the effect of decrease in exports on the exchange rate.

Subpart (b):

To determine

To determine the policy of Government to maintain the value of the currency.

Subpart (c):

To determine

To show the impact of reduction in exports in the economy.

Subpart (d):

To determine

To show the effect of policy options on the current account.

Subpart (e):

To determine

To show the effects under a floating exchange rate system.

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5. We learnt the following equation in the class: Ak = sy - (n + 8)k where y = ko. Now, I transform this equation into: Ak/k = sy/k - (n + 8). I want you to use a diagram to show the steady state solution of this equation (In the diagram, there will be two curves - one represents sy/k and one represents (n + 8). In the steady state, of course, Ak/k = 0). In this diagram, the x-axis is k. What will happen to this diagram if the value of n increases?
Not use ai please
3. A country has the following production function: Y = K0.2L0.6p0.2 where Y is total output, K is capital stock, L is population size and P is land size. The depreciation rate (8) is 0.05. The population growth rate (n) is 0. We define: y = ½, k = 1 and p = . Land size is fixed. L a) Find out the steady state values of k and y in terms of p, the per capita land size.
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