MACROECONOMICS+ACHIEVE 1-TERM AC (LL)
10th Edition
ISBN: 9781319467203
Author: Mankiw
Publisher: MAC HIGHER
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Chapter 3, Problem 10PA
(a)
To determine
Private saving,
(b)
To determine
The equilibrium interest rate.
(c)
To determine
Private saving, public saving, and national saving.
(d)
To determine
New equilibrium interest rate.
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Suppose we only produce donuts in our economy, and we produce 500 donuts in a year. Each donut sells for $3, and we have $100 in the economy. What is the value of total production (or total spending) in this economy?
Group of answer choices
$100
$300
$500
$1500
Explain the relationship between these two formulas:
Y = C + I + G + EX – IM
S = (Y – T – C) + (T – G)
Suppose the production function in an economy is Y = K0.SL05, where K is the amount of capital and L is the amount of labor.
The economy begins with 25 units of capital and 25 units of labor.
Round answers to two places after the decimal when necessary.
a. How much output does the economy produce?
units of output
Chapter 3 Solutions
MACROECONOMICS+ACHIEVE 1-TERM AC (LL)
Ch. 3 - Prob. 1QQCh. 3 - Prob. 2QQCh. 3 - Prob. 3QQCh. 3 - Prob. 4QQCh. 3 - Prob. 5QQCh. 3 - Prob. 6QQCh. 3 - Prob. 1QRCh. 3 - Prob. 2QRCh. 3 - Prob. 3QRCh. 3 - Prob. 4QR
Ch. 3 - Prob. 5QRCh. 3 - Prob. 6QRCh. 3 - Prob. 7QRCh. 3 - Prob. 8QRCh. 3 - Prob. 1PACh. 3 - Prob. 2PACh. 3 - Prob. 3PACh. 3 - Prob. 4PACh. 3 - Prob. 5PACh. 3 - Prob. 6PACh. 3 - Prob. 7PACh. 3 - Prob. 8PACh. 3 - Prob. 9PACh. 3 - Prob. 10PACh. 3 - Prob. 11PACh. 3 - Prob. 12PACh. 3 - Prob. 13PACh. 3 - Prob. 14PA
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- 12. Suppose an economy represented by the graph below started with K = 25, so it was in a steady state, but then disaster struck and most of the capital was destroyed. (Assume that no people were hurt so the labor force is the same size.) dK 25 K After the disaster would we expect the economy to grow or shrink? a. grow, I> dK b. grow, I dK d. shrink, I< dKarrow_forwardImagine the GDP per capita of a country doubles every one hundred years. What would the shape of a linear-scale graph and a ratio-scale graph be? Select one or more: a. Linear scale: an upward-sloping curve with increasing slope (called convex shape) Ratio scale: an upward-sloping straight line b. Linear scale: an upward-sloping straight line Ratio scale: a straight horizontal line c. Linear scale: an upward-sloping straight line Ratio scale: an upward-sloping curve with decreasing slope (called concave shape) d. Linear scale: an upward-sloping convex curve Ratio scale: an upward-sloping convex curvearrow_forwardSuppose the following transactions occur during the current year: 1. Kevin orders 60 bottles of wine from a French distributor at a price of $30 per bottle. 2. AU.S. company sells 300 textbooks to a Canadian company at $45.00 per textbook. 3. Rajiv, a U.S. citizen, pays $1,500 for a computer he orders from Honeycrisp (a U.S. company).arrow_forward
- Between 2006 and 2007, GDP per capita in Afghanistan increased from $381 to $439. We estimate the growth rate of GDP to be: a) 7.07%. b) 13.21%. c) 14.15%. d) 15.22%.arrow_forwardProblem 2 Assume that total output is determined by the formula: Total Output = Number of Workers x Productivity (a) If the workforce is growing by 1 percent a year but productivity doesn’t improve, how fast can output increase? (b) If productivity increases by 3 percent and the number of workers increases by 1 percent a year, how fast will output grow?arrow_forwardVarrow_forward
- 10) True or False: Countries that currently have low real GDPs per capita are destined to always have lower living standards than countries that currently have high real GDPs per capita.arrow_forwardSuppose an economy has four sectors: Mining Lumber, Energy, and Transportation Mining sells 10% of its output to Lumber, 60% to Energy, and retains the rest. Lumber sells 5% of Kits output to Mining, 60% to Energy, 25% to Transportation, and retains the rest. Energy sells 30% of its output to Mining, 15% to Lumber, 25% to Transportation, and retains the rest. Transportation sells 25% of its output to Mining, 15% to Lumber, 50% to Energy, and retains the rest a. Construct the exchange table for this economy. b. Find a set of equilibrium prices for this economy a Complete the exchange table below Distribution of Output from: Mining Lumber Energy Transportation (Type integers or decimals b. Denote the prices (that is, dollar values) of the total annual outputs of the Mining, Lumber, Energy, and Transportation sectors by P. PL. PE, and Pr respectively If p₁-$100, then pµ-$___‚ p_ - $¯¯¯‚ and pµ- (Round to the nearest dollar as neaded Purchased by: Mining Lumber Energy Transportation 1-57arrow_forwardIn 1928, Charles Cobb and Paul Douglas published a study in which they modeled the growth of the US economy during the period 1899 to 1922. The function used to model production was of the form: (1) P(L, K) = 6LªK!-a where P is total production (monetary value of goods produced in the year); L, the amount of work (total number of person-hours worked in a year); and K, the amount of capital invested (monetary value of machinery, equipment and buildings). In these terms, the hypotheses made by Cobb and Douglas can be stated as follows: (i) If either labor or capital cancel each other out, so does production. (ii) The marginal productivity of labor is proportional to the amount of output per unit of work. (iii) The marginal productivity of capital is proportional to the amount of production per unit of сapital. 1. The output per unit of work is (a) Tick the alternative that, for some constant a, describes the hypothesis (ii) = aP·L. = a. P () aL L P = a. (b) If we keep K constant, K = K0,…arrow_forward
- 21) If real GDP grows from $10 trillion in 2002 to $10.5 trillion in 2003, the growth rate for real GDP is 21) A) 10%. B) 0.5%. C) 5%. D) 50%.arrow_forwardSuppose an economy has four sectors: Mining, Lumber, Energy, and Transportation. Mining sells 10% of its output to Lumber, 60% to Energy, and retains the rest. Lumber sells 5% of its output to Mining, 60% to Energy, 25% to Transportation, and retains the rest. Energy sells 30% of its output to Mining, 15% to Lumber, 25% to Transportation, and retains the rest. Transportation sells 25% of its output to Mining, 15% to Lumber, 50% to Energy, and retains the rest. a. Construct the exchange table for this economy. b. Find a set of equilibrium prices for this economy. a. Complete the exchange table below. Distribution of Output from: Mining Lumber Energy Transportation (Type integers or decimals.) Purchased by: Mining Lumber Energy Transportationarrow_forwardMy question is how to complete the last part talking about the 1200 bushels of corn and 1000 tons of steel.arrow_forward
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