9. Consider an economy with the following aggregate production function F(K, L) = AKL, where A = Ag the and g ğ is per-capita government purchases. An increase in g of per capita GDP. A. Raises; Steady-state level B. Raises; Growth rate C. Decreases; Steady-state level D. Does not affect; The level or growth rate 10. According to the Romer model, objects are A. Nonrivalrous; Nonrivalrous B. Rivalrous; Nonrivalrous C. Rivalrous; Rivalrous D. Nonrivalrous; Rivalrous and ideas are

9. Consider an economy with the following aggregate production function F(K, L) = AKL, where A = Ag the and g ğ is per-capita government purchases. An increase in g of per capita GDP. A. Raises; Steady-state level B. Raises; Growth rate C. Decreases; Steady-state level D. Does not affect; The level or growth rate 10. According to the Romer model, objects are A. Nonrivalrous; Nonrivalrous B. Rivalrous; Nonrivalrous C. Rivalrous; Rivalrous D. Nonrivalrous; Rivalrous and ideas are

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter20: Economic Growth In The Global Economy

Section: Chapter Questions

Problem 2P

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Suppose an economy begins in steady state. By what proportion does per capita GDP change in the long run in reponse to each of the following changes? Production function is Y=AK^1/3L^2/3 a. Investment rate doubles b. depreciation rate falls by 10% c. Productivity level rises by 10% d. Earthquake destrys 75% of the capital stock e. Generous immigration policy lead the population to double
9 An island nation is in a steady state. A major hurricane passes over the nation and destroys half of its capital stock. Using the Solow Model for growth, what happens to gross domestic product (GDP), investment, and net investment in the short run and the long run? Illustrate with a figure and explain.
Consider an economy with a Cobb-Douglas production function with α = 1/3 that begins in steady state with a growth rate of technological progress of g of 2 percent. Consider what happens when g increases to 3 percent. (a) What is the growth rate of output per worker before the change? What happens to this growth rate in the long run? (b) Perform a growth accounting exercise for the economy, decomposing the growth rate in output per capita into components contributed by capital per capita growth and technology growth. What is the contribution of the change in g to output per capita growth according to this formula? (c) In what sense is the growth accounting result in part b producing a misleading picture of this experiment? Explain why this is the case.
Consider an Economy in steady state, with a Cobb Douglas Production function. They have a savings rate of 45% and a capital share of 2/7. Technological progress is 1%, population growth is 3%, and Depreciation is 5%. 1. Derive the Production function per effective worker and solve for steady state capital, output, and consumption per effective worker. 2. What is MPK in the steady state? Is this country saving too much or too little? How do you know? 3. What should you lower or raise the saving rate to, in order to reach the golden rule steady state
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14. If output is described by the production function Y = AK0.2L0.8, then the production function has: Select one: A. Constant returns to scale and the share of labor in GDP is 0.2. B. increasing returns to scale and the share of labor in GDP is 0.2. C. Decreasing returns to scale and the share of labor in GDP is 0.8. D. constant returns to scale and the share of labor in GDP is 0.8.
Suppose an economy begins in steady state. By what proportion does per capita GDP change in the long run in reponse to each of the following changes? Production function is Y=AK^1/3L^2/3 d. Earthquake destrys 75% of the capital stock e. Generous immigration policy lead the population to double Fast answer
Find- A) if the base year in the year 2012 , the real gdp for 2020 equals $ ______and the real GDP for 2021 equals $______ B) The annual growth rate of real GDP in 2021 is _______ % Please find both
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