Principles Of Macroeconomics V 8.0
18th Edition
ISBN: 9781453378717
Author: Taylor
Publisher: BOSTON ACADEMIC (DBA FLAT WORLD)
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Textbook Question
Chapter 7, Problem 4SCQ
Assume there are two countries: South Korea and the United States. South Korea grows at
For the sake of simplicity, assume they both start from the same fictional income level,
What will the incomes of the United States and South Korea he in 20 years? By how many multiples will each country’s income grow in 20 years?
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Students have asked these similar questions
For the two questions, use the provided Lorenz curve.
Income
100%
Lorenz curve
If the economy's income were distributed according
to the Equality line, what would the Gini coefficient
be?
1
0
0.5
Infinity
80
60
60
60
10
40
If the economy's income were distributed according
to the A line, how much of the economy's income is
earned by the third quintile of families?
60%
40%
20%
100%
20
Equality
0
20%
40
40
A
50
60
80
100
Families
1. For the following utility functions, (i) calculate the MRS, (ii) show whether the MRS is constant, or
diminishing, or increasing, (iii) calculate the degree of homogeneity, (iv) check the convexity of the
Indifference Curve using the condition that for a function to be strict quasi-concave, it must be that
f2f11-2f1f2f12+ ff22 < 0, (v) based on MRS's characteristics, draw an approximate Indifference
Curve, and (vi) comment on the type of utility function.
(a) U(x, y) = 3x + y
(b) U(x, y)=√√x y
(c) U(x, y)=√√x + y
(d) U(x, y)=xy
x+y
A
9R, where
1-b 1-b
Question Two Consider the IS-LM Model. Let the IS equation be Y =
(1b) is the marginal propensity to save, g is the investment sensitivity to interest rates,
and A is an aggregate of exogenous variables. Let the LM equation be Y = +=R, where
k and 1 are income and interest sensitivity of money demand, and Mo is real money balances.
Mo
k k
It is given b
=
0.7, g = 100, A = 252, k = 0.25, l = 200, and Mo 176.
a) Utilize the given numbers to substitute the variables in the model, and then write
down the IS-LM equation system in matrices form.
b) Solve for the equilibrium values of Y and R using Cramer's Rule.
(Note: Keep 2 digits after the decimal point.)
Chapter 7 Solutions
Principles Of Macroeconomics V 8.0
Ch. 7 - Explain what the Industrial Revolution was and...Ch. 7 - Explain the difference between property rights and...Ch. 7 - Are there other ways in which we can measure...Ch. 7 - Assume there are two countries: South Korea and...Ch. 7 - What do the growth accounting studies conclude are...Ch. 7 - What policies can the government of a free-market...Ch. 7 - List the areas where government policy can help...Ch. 7 - Use an example to explain why, after periods of...Ch. 7 - Would the following events usually lead to capital...Ch. 7 - What are the advantages of backwardness for...
Ch. 7 - Would you expect capital deepening to result in...Ch. 7 - Why dues productivity growth in high-income...Ch. 7 - How did the Industrial Revolution increase the...Ch. 7 - How much should a nation be concerned if its rate...Ch. 7 - How is GDP per capita calculated differently from...Ch. 7 - How do gains in labor productivity lead to gains...Ch. 7 - What is an aggregate production function?Ch. 7 - What is capital deepening?Ch. 7 - What do economists mean when they refer to...Ch. 7 - For a high-income economy like the United States,...Ch. 7 - List some arguments for and against the likelihood...Ch. 7 - Over the past 50 years, many countries have...Ch. 7 - Labor Productivity and Economic Growth outlined...Ch. 7 - Change in labor productivity is one of the most...Ch. 7 - Refer back to the Work It Out about Comparing the...Ch. 7 - Education seems to be important for human capital...Ch. 7 - Describe some of the political and social...Ch. 7 - Why is investing in girls education beneficial for...Ch. 7 - How is the concept of technology, as defined with...Ch. 7 - What sorts of policies can governments implement...Ch. 7 - As technological change makes us more sedentary...Ch. 7 - An economy starts off with a GDP per capita of...Ch. 7 - An economy starts off with a GDP per capital of...Ch. 7 - Say that the average worker in Canada has a...Ch. 7 - Say that the average worker in the U.S. economy is...
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