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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Assume that a country's per-worker production is y = k/2, where y is output per worker and k is capital per worker. Assume also that 10 percent of capital depreciates per year (= 0.10) 2 and there is no population growth or technological change. a. If the saving rate (s) is 0.4, what are capital per worker, production per worker, and consumption per worker in the steady state? b. Solve for steady-state capital per worker, production per worker, and consumption per worker with s = 0.6. c. Solve for steady-state capital per worker, production per worker, and consumption per worker with s = 0.8.

Economic Growth II- Work It Out Question 1 An economy has a Cobb-Douglas production function: Y = K (LE)¹- The economy has a capital share of 0.35, a saving rate of 45 percent, a depreciation rate of 5.00 percent, a rate of population growth of 5.50 percent, and a rate of labor- augmenting technological change of 4.0 percent. It is in steady state. c. The economy has capital than at the Golden Rule steady state. To achieve the Golden Rule steady state, the saving rate needs to d. Suppose the change in the saving rate you described in part c occurs. During the transition to the Golden Rule steady state, the growth rate of output per worker will be the rate you derived in part a. After the economy reaches its new steady state, the growth rate of output per worker will be

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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