Question 1: In each state, how many stable steady states are there?. Question 2: In each state, which points are stable steady states? : Question 3: Explain each state. State (a): Two stable steady-states State (b): Fragile economic booms followed by stagnation trap Even in this case, economy may fluctuate forever. kM k ke k k State (c): Economy can bounce around infinitely between k' and k" without converging. State (d): Animal spirits play an important role when economic activity is stagnant. K+14 k+14 State (c): Economy can bounce around infinitely between k' and k" without converging. State (d): Animal spirits play an important role when economic activity is stagnant. kM. k k k Question 4: Consider the function N(k+1) = "*1, where s, = s(r:+1) = s(r(k+1)). St Differentiate the function N(k+1) with respect with k+1, and express the result using dlog(st) dlog(1+rt+1) -and dlog(1+rt+1) dlog(kt+1)

Question 1: In each state, how many stable steady states are there?. Question 2: In each state, which points are stable steady states? : Question 3: Explain each state. State (a): Two stable steady-states State (b): Fragile economic booms followed by stagnation trap Even in this case, economy may fluctuate forever. kM k ke k k State (c): Economy can bounce around infinitely between k' and k" without converging. State (d): Animal spirits play an important role when economic activity is stagnant. K+14 k+14 State (c): Economy can bounce around infinitely between k' and k" without converging. State (d): Animal spirits play an important role when economic activity is stagnant. kM. k k k Question 4: Consider the function N(k+1) = "*1, where s, = s(r:+1) = s(r(k+1)). St Differentiate the function N(k+1) with respect with k+1, and express the result using dlog(st) dlog(1+rt+1) -and dlog(1+rt+1) dlog(kt+1)

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter7: Macroeconomic Measurements, Part Ii: Gdp And Real Gdp

Section: Chapter Questions

Problem 11QP

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