4. Since more capital allows more output to be produced, it is always better for a country to have (and maintain) a higher capital stock. Comment
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- Does a trade surplus help to guarantee strong economic growth?7. Assume an economy without population growth or technological progress. Their production function is given by ? = 35?0.5. Their currency capital stock is 100, and the depreciation rate is 17.5%. Give a savings rate such that: Income per worker will grow over the current period Income per worker stay the same over the current period Income per worker will fall over the current period (Hint: First, find how the capital stock will change with the savings rate you choose, then how will this change in capital stock affect income per worker?)Please comment! Since more capital allows more output to be produced, it is always better for a country to have (and maintain) a higher capital stock.?
- Question 1: In Ghana, the capital share of GDP is about 40 percent, the average growth in output is about 2 percent per year, the depreciation rate is about 3 percent per year, and the capital–output ratio is about 1.5. Suppose that the production function is Cobb–Douglas and that Ghana has been in a steady state. a. What must the saving rate be in the initial steady state? [Hint: Use the steady-state relationship, sy = (δ + n + g)k.] b. What is the marginal product of capital in the initial steady state? c. Suppose that public policy alters the saving rate so that the economy reaches the Golden Rule level of capital. What will the marginal product of capital be at the Golden Rule steady state? Compare the marginal product at the Golden Rule steady state to the marginal product in the initial steady state. Explain. d. What will the capital–output ratio be at the Golden Rule steady state? (Hint: For the Cobb–Douglas production function, the capital–output ratio is related to the…Briefly explain and critically evaluate the role of public and private investment in Pakistan. Also point out their role in achieving sustainable economic growth of Pakistan.Summarize the Venezuela economy and oil dependency as an example of Capital Flight. Mention another case of an economy as an example of capital flight. Discuss the causes and consequences in that economy, and suggest some policy can help such economies to recover from capital flight phenomena.
- 14... Consider this statement: “Devoting a larger share of national output to investment would help to restore rapid productivity growth and rising living standards.” Under what conditions is the statement accurate?2.5 Policies That Promote Capital Deepening. Which of the following will promote economic growth through capital deepening? Higher taxes used to finance universal health care Increased imports to purchase new flat-screen TVs for consumers Increased imports to purchase supercomputers for industryQuestion 1:In Ghana, the capital share of GDP is about 40 percent, the average growth in output is about2 percent per year, the depreciation rate is about 3 percent per year, and the capital–output ratiois about 1.5. Suppose that the production function is Cobb–Douglas and that Ghana has beenin a steady state.a. What must the saving rate be in the initial steady state? [Hint: Use the steady-staterelationship, sy = (δ + n + g)k.]b. What is the marginal product of capital in the initial steady state?c. Suppose that public policy alters the saving rate so that the economy reaches the GoldenRule level of capital. What will the marginal product of capital be at the Golden Rule steadystate? Compare the marginal product at the Golden Rule steady state to the marginal productin the initial steady state. Explain.d. What will the capital–output ratio be at the Golden Rule steady state? (Hint: For the Cobb–Douglas production function, the capital–output ratio is related to the marginal product…
- I need an answer max in an hour please. "Say whether following statement is True or False and Please provide a concise explanation of this as well as an explanation with a diagram, if its possible to do." If there are free flows of capital in an open economy, all countries share a common production function and technology, and have the same depreciation rate, we would expect to observe unconditional convergence of levels of per capita output, but not per capita consumption.2. Suppose that two countries (A and B) are exactly alike in every respect except that thecitizens of country A have a higher saving rate than the citizens of country B.Which country will have the higher level of: i) Capital per worker in the steady state?ii) Output per worker in the steady state?iii) Rate of growth of Output per worker in the steady state?Use one graph to illustrate the answer and explain your answer of i), ii), and iii)What is the definition of Capital Flight? What are the causes of Capital Flight? How to recovery from Capital Flight? Summarize the Venezuela economy and oil dependency as an example of Capital Flight. Mention another case of an economy as an example of capital flight. Discuss the causes and consequences in that economy, and suggest some policy can help such economies to recover from capital flight phenomena