3. a. b. C. d. By using the same production function in question 2: Assume the followings: s =0,20 u=0,02 b=0,04 a=0,05 Parameters marginal propensity to save Population growth rate Technological growth rate Depreciation rate Equations Y = WK'L¹-r K = s. f(k) - ak i == U L :=b W S = s. f(k) Production Function Capital Accumulation Population Growth Technological Progress Savings Find steady-state level of capital per effective labor: k* Draw a graph and show output function, actual estment and rea ven investment lines. Assume that in this economy, people start spending more and therefore marginal propensity to save decline permanently. What will happen to variables in the model (steady-state level capital per effective labor; output growth etc.). Instead of reduction in saving assume this time that we face lower fertility rate in the country. What will happen to variables in the model (steady-state level capital per effective labor; output growth etc.).
3. a. b. C. d. By using the same production function in question 2: Assume the followings: s =0,20 u=0,02 b=0,04 a=0,05 Parameters marginal propensity to save Population growth rate Technological growth rate Depreciation rate Equations Y = WK'L¹-r K = s. f(k) - ak i == U L :=b W S = s. f(k) Production Function Capital Accumulation Population Growth Technological Progress Savings Find steady-state level of capital per effective labor: k* Draw a graph and show output function, actual estment and rea ven investment lines. Assume that in this economy, people start spending more and therefore marginal propensity to save decline permanently. What will happen to variables in the model (steady-state level capital per effective labor; output growth etc.). Instead of reduction in saving assume this time that we face lower fertility rate in the country. What will happen to variables in the model (steady-state level capital per effective labor; output growth etc.).
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.8P
Related questions
Question
Y=W.Kr.L1-r
W=technology and r is standard share parameter of Cobb-Douglas production.
b. |
Draw a graph and show output function, actual investment and breakeven investment lines. |
c. |
Assume that in this economy, people start spending more and therefore marginal propensity to save decline permanently. What will happen to variables in the model (steady-state level capital per effective labor; output growth etc.). |
d. |
Instead of reduction in saving assume this time that we face lower fertility rate in the country. What will happen to variables in the model (steady-state level capital per effective labor; output growth etc.). |
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