The saving rate.

Question

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Answer 1

Question

Chapter 8, Problem 1QQ

To determine

The saving rate.

Expert Solution & Answer

Answer to Problem 1QQ

Option (a) is the correct answer.

Explanation of Solution

Option (a):

The production function is given as y=20k12 . When the current capital stock is 100 and the depreciation rate is 10 percent and the population growth rate is 2 percent, the saving rate must exceed 6 percent for the income of the person to grow. Thus, option (a) is correct.

Option (b):

With the given production function, the income of the person grows when the saving rate exceeds 8 percent. However, this is not the minimum value for this condition. Thus, option (b) is incorrect.

Option (c):

With the given production function, the income of the person grows when the saving rate exceeds 10 percent. However, this is not the minimum value for this condition. Thus, option (c) is incorrect.

Option (d):

With the given production function, the income of the person grows when the saving rate exceeds 12 percent. However, this is not the minimum value for this condition. Thus option (d) is incorrect.

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Students have asked these similar questions

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.

Answer 2

Question

Chapter 8, Problem 1QQ

To determine

The saving rate.

Expert Solution & Answer

Answer to Problem 1QQ

Option (a) is the correct answer.

Explanation of Solution

Option (a):

The production function is given as y=20k12 . When the current capital stock is 100 and the depreciation rate is 10 percent and the population growth rate is 2 percent, the saving rate must exceed 6 percent for the income of the person to grow. Thus, option (a) is correct.

Option (b):

With the given production function, the income of the person grows when the saving rate exceeds 8 percent. However, this is not the minimum value for this condition. Thus, option (b) is incorrect.

Option (c):

With the given production function, the income of the person grows when the saving rate exceeds 10 percent. However, this is not the minimum value for this condition. Thus, option (c) is incorrect.

Option (d):

With the given production function, the income of the person grows when the saving rate exceeds 12 percent. However, this is not the minimum value for this condition. Thus option (d) is incorrect.

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Answer 3

Question

Chapter 8, Problem 1QQ

To determine

The saving rate.

Expert Solution & Answer

Answer to Problem 1QQ

Option (a) is the correct answer.

Explanation of Solution

Option (a):

The production function is given as y=20k12 . When the current capital stock is 100 and the depreciation rate is 10 percent and the population growth rate is 2 percent, the saving rate must exceed 6 percent for the income of the person to grow. Thus, option (a) is correct.

Option (b):

With the given production function, the income of the person grows when the saving rate exceeds 8 percent. However, this is not the minimum value for this condition. Thus, option (b) is incorrect.

Option (c):

With the given production function, the income of the person grows when the saving rate exceeds 10 percent. However, this is not the minimum value for this condition. Thus, option (c) is incorrect.

Option (d):

With the given production function, the income of the person grows when the saving rate exceeds 12 percent. However, this is not the minimum value for this condition. Thus option (d) is incorrect.

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Answer 4

Question

Chapter 8, Problem 1QQ

To determine

The saving rate.

Expert Solution & Answer

Answer to Problem 1QQ

Option (a) is the correct answer.

Explanation of Solution

Option (a):

The production function is given as y=20k12 . When the current capital stock is 100 and the depreciation rate is 10 percent and the population growth rate is 2 percent, the saving rate must exceed 6 percent for the income of the person to grow. Thus, option (a) is correct.

Option (b):

With the given production function, the income of the person grows when the saving rate exceeds 8 percent. However, this is not the minimum value for this condition. Thus, option (b) is incorrect.

Option (c):

With the given production function, the income of the person grows when the saving rate exceeds 10 percent. However, this is not the minimum value for this condition. Thus, option (c) is incorrect.

Option (d):

With the given production function, the income of the person grows when the saving rate exceeds 12 percent. However, this is not the minimum value for this condition. Thus option (d) is incorrect.

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Answer 5

Chapter 8, Problem 1QQ

To determine

The saving rate.

Expert Solution & Answer

Answer to Problem 1QQ

Option (a) is the correct answer.

Explanation of Solution

Option (a):

The production function is given as y=20k12 . When the current capital stock is 100 and the depreciation rate is 10 percent and the population growth rate is 2 percent, the saving rate must exceed 6 percent for the income of the person to grow. Thus, option (a) is correct.

Option (b):

With the given production function, the income of the person grows when the saving rate exceeds 8 percent. However, this is not the minimum value for this condition. Thus, option (b) is incorrect.

Option (c):

With the given production function, the income of the person grows when the saving rate exceeds 10 percent. However, this is not the minimum value for this condition. Thus, option (c) is incorrect.

Option (d):

With the given production function, the income of the person grows when the saving rate exceeds 12 percent. However, this is not the minimum value for this condition. Thus option (d) is incorrect.

Answer 6

Chapter 8, Problem 1QQ

To determine

The saving rate.

Expert Solution & Answer

Answer to Problem 1QQ

Option (a) is the correct answer.

Explanation of Solution

Option (a):

The production function is given as y=20k12 . When the current capital stock is 100 and the depreciation rate is 10 percent and the population growth rate is 2 percent, the saving rate must exceed 6 percent for the income of the person to grow. Thus, option (a) is correct.

Option (b):

With the given production function, the income of the person grows when the saving rate exceeds 8 percent. However, this is not the minimum value for this condition. Thus, option (b) is incorrect.

Option (c):

With the given production function, the income of the person grows when the saving rate exceeds 10 percent. However, this is not the minimum value for this condition. Thus, option (c) is incorrect.

Option (d):

With the given production function, the income of the person grows when the saving rate exceeds 12 percent. However, this is not the minimum value for this condition. Thus option (d) is incorrect.

Answer 7

Chapter 8, Problem 1QQ

To determine

The saving rate.

Answer 8

Expert Solution & Answer

Answer to Problem 1QQ

Option (a) is the correct answer.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Option (a):

The production function is given as y=20k12 . When the current capital stock is 100 and the depreciation rate is 10 percent and the population growth rate is 2 percent, the saving rate must exceed 6 percent for the income of the person to grow. Thus, option (a) is correct.

Option (b):

With the given production function, the income of the person grows when the saving rate exceeds 8 percent. However, this is not the minimum value for this condition. Thus, option (b) is incorrect.

Option (c):

With the given production function, the income of the person grows when the saving rate exceeds 10 percent. However, this is not the minimum value for this condition. Thus, option (c) is incorrect.

Option (d):

With the given production function, the income of the person grows when the saving rate exceeds 12 percent. However, this is not the minimum value for this condition. Thus option (d) is incorrect.

Answer 12

Ch. 8 - Prob. 1QQ Ch. 8 - Prob. 2QQ Ch. 8 - Prob. 3QQ Ch. 8 - Prob. 4QQ Ch. 8 - Prob. 5QQ Ch. 8 - Prob. 6QQ Ch. 8 - Prob. 1QR Ch. 8 - Prob. 2QR Ch. 8 - Prob. 3QR Ch. 8 - Prob. 4QR

The saving rate.

The saving rate.

Answer to Problem 1QQ

Explanation of Solution

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Chapter 8 Solutions