Use the Solow model below to answer the question.Y = Af (K, H)dkY ₂syY₁K₂K3KK₁₁Suppose that Y₁ is 2,171, Y₂ is 5,768, and Y3 is 10,995. The savings rate for this economy is 12%and the depreciation rate is 8.9%.If this economy is currently at a GDP of 2,171, what is the smallest amount of foreign aid whichwould move the economy up to a GDP of 10,995?Assume that all foreign aid becomes investment. Round your final answer to two decimal places. Why was Land Use Reform a successful policy in several Asian countries in promoting economicgrowth?By reallocating farmland for use in manufacturing, industrialization was incentivized.By making public land available for farming, peasant farmers could rotate crops more easily.scounBy taking farmland away from landlords and giving it to peasant farmers, those farmers had an incentive toimprove their yields.By making all farmland publicly owned, farmers could collectively work to maximize their yields.

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Use the Solow model below to answer the question. Y3 Y₂ K₁ K₂ K3 Y = Af (K,H) dk SY K

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Imagine you are an economist working for the Government of Econville. You are tasked with developing a model to predict the GDP of the country based on various factors such as interest rates, inflation, unemployment rate, and population growth. You collect quarterly data for the past 20 years and start building your model. After running your initial regression, you notice some peculiar patterns in the residuals: (1) residuals do not have identical variances across different levels of the independent variables; (2) two or more independent variables in a regression model are highly correlated with each other; (3) the correlation of a variable with its own past values. You suspect that your model might be suffering from 3 potential issues in the regression analysis that can affect reliability and validity. List 2 factors in your model that might be causing the Heteroscedasticity and give a reason
Explain why in every econometric model there must be an error term, explain its function.
Imagine you are an economist working for the Government of Econville. You are tasked with developing a model to predict the GDP of the country based on various factors such as interest rates, inflation, unemployment rate, and population growth. You collect quarterly data for the past 20 years and start building your model. After running your initial regression, you notice some peculiar patterns in the residuals: (1) residuals do not have identical variances across different levels of the independent variables; (2) two or more independent variables in a regression model are highly correlated with each other; (3) the correlation of a variable with its own past values. You suspect that your model might be suffering from 3 potential issues in the regression analysis that can affect reliability and validity. Based on Addressing Heteroscedasticity list one test you would employ to test this potential issue?
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