Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Question
Chapter 6, Problem 3NP
a)
To determine
To describe: The total output, capital labor-ratio and output per worker of each year is to be calculated when the production function is
b)
To determine
To describe:
The total output, capital labor-ratio and output per worker of each year is to be calculated when the production function is
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The production function used by the Australian Bureau of Statistics is written
Y = AK L rY
where Y is aggregate output, A is total-factor productivity, K is aggregate capital, L is the size of the
labor force, I is aggregate intermediate input (e.g., energy, material), and the exponents are
constants. Given this production function, which of the following expressions correctly represents
the growth rate of per-capita income, 9Y?
= gA + agK + BgL + Y9I
= gA + agk + (1 – B) gL +ygı
= 9A + agk + (B– 1) gL +Yg1
O None of the choices given is correct.
Write the production function (human capital (H) is included in TFP) and the logarithmic form of this production function then explain why the GDP growth will be at the end ofa given long period lower than at the beginning of this period, assuming that the average contribution of TFP to GDP average growth during the period is constant.
Please no written by hand and graph
Consider a small world that consists of two different countries, a developed and a developing country. In both countries, assume that the production function takes the following form: Y = F (K, LE) = K¹/4 (LE) 3/4, where Y is output, K is capital stock, L is total employment and E is labour augmenting technology. (a) Does this production function exhibit constant returns to scale in K and L? Explain. (b) Express the above production function in its intensive form (i.e., output per-effective worker y as a function of capital per effective worker k). (c) Solve for the steady-state value of y as a function of saving rate s, population growth rate n, technological progress g, and capital depreciation rate 6. (d) The developed country has a savings rate of 30% and a population growth rate of 2% per year. Meanwhile, the developing country has a savings rate of 15% and population growth rate of 5% a year. Technology evolves at the rate of 8% and 2% in…
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