Suppose some of the country's capital is suddenly destroyed. If the depreciation rate, savings rate, and production function remain unchanged, then the real growth rate will _____ in the short run and the steady-state level of capital will _____ increase, decrease, or stay the same?
Q: A nation can achieve higher economic growth if: Question options: a) the productivity of labor…
A: Economic growth refers to an increase in the real value of the aggregate output produced by an…
Q: Proposed strategies for achieving the objective of sustainable economic growth.
A: Economic Growth can be defined as a situation where there is an increase in the production of goods…
Q: please write in brief detail the meaning of “steady-state” and “balanced growth path” in the Solow…
A: Solow Growth Model is long run economic growth model which shows the interaction of technological…
Q: International data show a positive correlation between political stability and economic growth.…
A: In economics, there is said to be a positive correlation between the political stable a country…
Q: describe the process by which a decrease in income taxes impacts economic growth.
A: The aggregate output function, as well as the labor demand and supply curves, decide the direction…
Q: Economic growth is best defined as an increase in:
A: It is important to measure economic growth for knowing the the position of countries economy.
Q: In your opinion, why do some countries experience sustained levels of high growth that propel them…
A: When comparing one period of time to the next, economic growth is described as an increase in an…
Q: The great 18th- century economist Adam Smith wrote, “Little else is requisite to carry a state to…
A: Adam Smith advocates the theory of laissez-faire in his classical theory. It means that government…
Q: Why do diminishing returns not limit growth in new growth theory? Diminishing returns do not limit…
A: New Growth Theory states that knowledge about how to produce goods and services is an important…
Q: Define economic growth and discuss its utility at the scale of one country and at the global scale.
A: Economic growth is the rise in overall level of output of an economy. The most common way to measure…
Q: Which of the following causes economic growth? (A A decrease in the money supply A decrease in the…
A: * SOLUTION :- (7) From given information The OPTION E is correct answer.
Q: Which is NOT a source of productivity growth?
A: Firms try to increase productivity with various method.
Q: Explain the difference between long-run and short-run economic growth!
A: In an economy, economic growth is explained in two different periods such thay short-run and…
Q: THREE reasons why some Government policy does NOT increase productivity and economic growth. Ensure…
A: Throughout history, every government has used some sort of industrial policy—public programs aimed…
Q: If an economy moves from a steady state with a low saving rate to a higher savin rate, then in the…
A: Steady-state output per worker growth is equal to the growth rate of technology (i.e., g) So, an…
Q: Identify 4 public policies that can stimulate employment and facilitate economic growth in an…
A: In an economy, public policies refers to the government action that has an impact on the majority of…
Q: Economic growth is advantageous to a nation because it (A) promotes faster population growth. (B)…
A: Scarcity is a problem that exists when there are not enough goods and services available in the…
Q: Give an example of a country where the political stability lead to strong economic growth. Explain…
A: As the exact question number is not mentioned, we will answer only the first question. If you like…
Q: If you were in a position to run an economy, what steps would you take to raise our rate of…
A: Answer: *If i were in a position to run an economy *The following steps would be undertaken to raise…
Q: As economic growth models become more and more inclusive of realistic conditions and incorporating…
A: Answer-
Q: Explain why a fall in economic growth could lead to a rise in unemployment. Use a diagram to support…
A: Economic growth: It is the measure of the rise in the production of goods and services over a…
Q: Four Reasons why economic growth is important for a country
A: Gross domestic product is the market value of final goods and services that are produced within the…
Q: In order to achieve economic growth we need to either gain more resources or new
A: Economic growth is characterized as an expansion in a country's production of labor and products. An…
Q: Long-run economic growth can occur as a result of
A: Economic growth occurs as a result of increase in GDP.
Q: International data show a positive correlation between political stability and economic growth.…
A: Example of a country where there is no strong economic growth because of no political stability is…
Q: It would seem that a higher Steady State level of Y/L (y*) and K/L (k*) is a good thing. We know…
A: High savings leads to higher steady state but rate of savings of 80% to 90% is not good is explained…
Q: Which of the following explains the importance of education in economic growth? Group of answer…
A: Economic growth means an increase in the total production of goods and services in the economy. It…
Q: Which of the following factors contribute to economic growth? Question options: a) an increase in…
A: Economic growth in a country occurs when more output can be produced within a specific time period.…
Q: Name and explain three of the five policies to achieve faster economic growth.
A: When comparing one period of time to the next, economic growth refers to an increase in the…
Q: In an economy, the capital share of GDP is about 30 percent, the average growth in output is about 3…
A: In an economy, the capital share of GDP is about 30 percent, the average growth in output is about 3…
Q: An increase in would lead to an increase in long-run economic growth. a) consumer spending and…
A: Economic growth is the permanent increase in real GDP per capita.
Q: Which of the following causes sustained economic growth? Diminishing returns Increases in…
A: Economic growth occurs when there is an increase in real output over time. This measured by gross…
Q: Discuss three policies governments can use to promote economic growth
A: Government can adopt various techniques to promote economic growth.
Q: Suppose some of the country's capital is suddenly destroyed. If the depreciation rate, savings rate,…
A: When this happens, we've reached what's called the Steady-State Level of Capital. The steady-state…
Q: Explains the problems that declining populations can cause for long-run economic growth
A: Economic growth is an expansion in the production of goods and services in an economy. Economic…
Q: List as many causes of economic growth
A: Economic growth refers to an increase in the total value of all the goods and services produced in a…
Q: Discuss the methods and factors than can help to improve economic growth?
A: Economic growth(g) refers to the increase GDP i.e. increase in the market(mkt) value of all final…
Suppose some of the country's capital is suddenly destroyed. If the
increase, decrease, or stay the same?
Step by step
Solved in 2 steps
- Population 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 =Suppose some of the country's capital is suddenly destroyed. If the depreciation rate, savings rate, and production function remain unchanged, then the real growth rate will _____ in the short run and the steady-state level of capital will _____ A.increase, decrease B.decrease, decrease C.increase, stay the same D. decrease, stay the sameIn 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.
- Which of the following is unlikely to affect the rate of economic growth? Group of answer choices technological change the level of government spending the quality of available resources the quantity of available resources Which of the government policies below is most unlikely to encourage per capita economic growth? Group of answer choices the use of tax revenues for investment and capital formation promotion of education and training programs for workers high taxes on companies that spend a lot on capital formation special subsidies for capital-intensive forms of production Which of the following did not result in economic growth? Group of answer choices Installing a network of irrigation ditches and pumping stations in order to grow fruits and vegetables in parts of southern California. Many citizens emigrating from Zimbabwe when a politically repressive regime took office. The invention of a threshing machine for harvesting grains. Increased government…An economy with a population growth rate of 1.5 percent and a rate of technological growth of 2.5 percent is in the steady state. If the capital- output ratio is 2, depreciation amounts to 10 percent of GDP, and capital income is 25 percent of GDP, then this economy would need to__________ the Golden Rule steady state. O. increase its saving rate to reach O. do nothing to its saving rate because this economy is already at O. decrease its saving rate to reach O. decrease the steady-state stock of capital per effective worker to reachFull explanation. Economic growth is not correct. Thank you
- 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 beDiscuss the challenges for the Chinese economy in sustaining the accelerated rate of economic growth.is it true or false that the growth rate of the GDP per worker for an economy where the capital to output ratio is constant represent the long run economic growth? why
- Suppose Westeros produces output according to the production function: Y = √K The fraction of output that is saved and invested in new capital is 20%. The depreciation rate is 5%. Use this information to answer the following questions. Macmillan Learning a. What is the steady-state amount of capital (K) in Westeros? b. What is the steady-state amount of output (Y*) in Westeros? c. If Westeros had started out with 25 units of capital, what would the Solow model predict would happen to its output in the long run? O It will decrease, since that is above its steady state level of output of 4 It will decrease, since that is above its steady state level of output of 16 It will increase, since that is below its steady state level of output of 16 It will increase, since that is above its steady state level of output of 41 It will remain at 25, since that is its steady state level of outputProduction function is given by Y = 3K"(AN)!-a, where a=2/3. The rate of depreciation of capital is equal to 12 percent, the rate of technological progress is equal to 5 percent, and the rate of population growth is equal to 3 percent. The economy was in the steady state at time t and the level of technology was equal to A:=30. Use the Solow growth model to answer the following questions. (Please fill in numbers; use a comma as a decimal separator: 10,5) 1. If the saving rate s=40 percent, the steady state level of output per unit of effective labor at time t is equal to 2. If the saving rate s=40 percent, the steady state level of consumption per unit of effective labor at time t is equal to 3. If the saving rate s=40 percent, the steady state level of consumption per worker at time t is equal toQUESTION 1 (10 marks) Consider the Solow growth model without population growth or technological change. The parameters of the model are given by s = 0.2 (savings rate) and δ = 0.05 (depreciation rate). Let k denote capital per worker; y output per worker; c consumption per worker; i investment per worker. a. Rewrite production function per-worker terms. b. Find the steady-state level of the capital stock, kss