In the steady state, _____ consumption per worker is maximized. investment per worker exceeds depreciation per worker. the growth rate of output per worker equals zero. capital per worker grows.
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- The economy does not grow once it reaches a steady state. This result is based on the assumption that output depends on capital and labor there is no saving. there is no depreciation. output depends on technologiesPopulation Growth and Technological Progress – Work It Out PLEASE WRITE ANSWERS CLEARLY An economy has a Cobb-Douglas production function: Y = K“(LE)'-a The economy has a capital share of 0.30, a saving rate of 42 percent, a depreciation rate of 4.00 percent, a rate of population growth of 5.25 percent, and a rate of labor-augmenting technological change of 3.5 percent. It is in steady state. b. Solve for capital per effective worker (k*), output per effective worker (y*), and the marginal product of capital. k* = y* = marginal product of capital =The steady occurs when the economy is in equilibrium. Specifically, the steady state refers to the situation where K/N and Y/N are constant. K/N will not change when investment per worker equals depreciation per worker. During the adjustment process, the growth rates of Y, Y/N, and K/N will all be negative. Once the steady state is reached, these variables are constant and the growth rates will be zero. True False
- Country A and country B have the same Cobb-Douglas production function except country A has a capital stock of 5,000, a population of 12,000 and employment of 10,000. Country B has a capital stock of 8,000, a population of 24,000 and employment of 20,000. Technology, national saving rate, depreciation rate and population growth rate are the same in the two countries Today country B has a higher standard of living but country A will catch up. Today country B has a higher standard of living and country A will not catch up. Today country A has a higher standard of living but country B will catch up. Today country A has a higher standard of living and country B will not catch up.In a Solow economy with technological progress, the production function is given by: Y = KO.5(LE)0.5. Furthermore, the saving rate of this economy is 0.2. The population growth rate is 0.03. The depreciation rate is 0.01. The technological progress is given by g which is equal to 0.01. Define y = Y/LE and k = K/LE. a) Find out the steady state values of k (i.e.: k*) and y (i.e.: y"). 2. Ay Ak AY ΔΚ b) Find out the values of and in the steady state. K y'k'YSuppose an economy begins in steady state. By what proportion does per capita GDP change in the long run in reponse to each of the following changes? Production function is Y=AK^1/3L^2/3 a. Investment rate doubles b. depreciation rate falls by 10% c. Productivity level rises by 10% d. Earthquake destrys 75% of the capital stock e. Generous immigration policy lead the population to double
- Suppose that the production function is Y = 10 ( K )^1/4 ( L )^3/4 and capital lasts for an average of 50 years . Assume that the rate of growth of population equals 0 and saving rate s = 0.128 . a. Calculate the steady - state level of capital per worker , output per worker , consumption per worker , saving and investment per worker , and depreciation per worker b. Suppose that initial level of capital per worker is 100 , explain the moving process to the steady state . c . Use relevant graph to demonstrate . Plsss provide detailed answers, thank youY - K"(LE) The economy has a capital share of 0.20, a saving rate of 45 percent, a depreciation rate of 3.75 percent, a rate of population growth of 5.00 percent, and a rate of labor-augmenting technological change of 3.5 percent. It is in steady state. b. Solve for capital per effective worker (k"), output per elffective worker (y"), and the marginal product of capital. k' - y* = marginal product of capital =Countries X and Y have the same amount of labour and the same level of technology, but country X has less capital. Country X's labour productivity will be __________ Y's and its total factor productivity will be __________ Y's. higher than; lower than higher than; the same as the same as; lower lower than; lower than lower than; the same as
- Production function is given by Y = 45K (AN)-a, where a=1/3. The rate of depreciation of capital is equal to 10 percent, and the rate of population growth is equal to 2 percent. The saving rate at time t was equal to 12 percent and the level of technology A, was equal to 5. The economy was in the steady state at time t and the rate of growth of aggregate capital stock was equal to 5 percent. Use the Solow growth model to answer the following questions. (Please fill in numbers, percentage values should be provided as numbers greater than 1. For example if inflation is 10 percent, you should write "10" in the blank space provided) 1. The rate of technological progress at time t was equal to 2. The level of per capita consumption at time t was equal to 3. Assume that at time t+1 the saving rate increased to the optimal (golden rule) saving rate. The difference between the new steady state level of percent consumption per unit of effective labor and the level of consumption per unit of…Suppose that the production function is Y= 10(K)1/4 (L)3/4 and capital lasts for an average of 50 years so that 2% of capital wears out every year. Assume that the rate of growth of population equals 0. If the saving rate, s =0.128, calculate the steady-state level of capital per worker, output per worker, consumption per worker, saving and investment per worker and depreciation per worker.An economy's production function as follows Y = 8 (K)¹/2 (EL)¹/2 If depreciation rate is 10%, population growth rate is 4%, tech progress grows 6%, and saving rate is 20%. a. b. C. d. e. f. Write production function in term of per effective worker variables. Find steady state capital per effective worker, output per effective worker, consumption per effective worker, investment per effective worker. Find growth rate of capital per worker and output per worker at steady state. Find growth rate of capital stock and total output at steady state. Propose policies to encourage long run growth of total output and living standard? Draw relevant graph for the above questions.