Answer: In the long run, [ Select ] ; growth rate of capital per worker [Select ] [ Select] ; growth rate of output per worker [ Select ] N [ Select ] [ Select ]
Answer: In the long run, [ Select ] ; growth rate of capital per worker [Select ] [ Select] ; growth rate of output per worker [ Select ] N [ Select ] [ Select ]
Chapter2: Production Possibilities Frontier Framework
Section: Chapter Questions
Problem 11QP
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![Answer: In the long run,
[ Select ]
; growth rate of capital per worker
[ Select ]
[ Select ]
growth rate of output per worker
[ Select ]
= [ Select ]
[ Select ]
>](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F12a3b6ff-52e0-4bd5-a604-586aafad7720%2F0843f858-3578-4989-b10f-3655bea04fb4%2Foioq32n_processed.png&w=3840&q=75)
Transcribed Image Text:Answer: In the long run,
[ Select ]
; growth rate of capital per worker
[ Select ]
[ Select ]
growth rate of output per worker
[ Select ]
= [ Select ]
[ Select ]
>
![Suppose that the economy of Rabbit Republic is characterized by the following functions:
Y = 0.5/K/N
C = (1– s) Y
I = sY
Capital evolves according to
K4+1 = Kį – SK + I
(These notations are conventional and as used in the class.)
a. Can you express the model in a per-worker form?
Answer: Yes
b. Assume that this economy starts with Ko = 16 and No = 4. Assume also that there is no population growth, saving rate s = 0.3 and 8 = 0.05. Fill in the following
table as the time progresses for this economy.
Time
Capital per worker
Output per worker
Consumption per worker
Investment per worker
Depreciation per worker
[ Select]
lo
4
0.7
7
0.3
1
[ Select ]
[ Select]
[ Select)
[ Select]
[ Select ]
2
[ Select]
[ Select]
[ Select]
[ Select]
[ Select]
...
[ Select]
[Select]
[ Select]
[ Select]
[ Select)
c. What are the steady-state values for capital per worker, output per worker, consumption per worker and investment per worker for this economy? Without](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F12a3b6ff-52e0-4bd5-a604-586aafad7720%2F0843f858-3578-4989-b10f-3655bea04fb4%2Fnd5o7a_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose that the economy of Rabbit Republic is characterized by the following functions:
Y = 0.5/K/N
C = (1– s) Y
I = sY
Capital evolves according to
K4+1 = Kį – SK + I
(These notations are conventional and as used in the class.)
a. Can you express the model in a per-worker form?
Answer: Yes
b. Assume that this economy starts with Ko = 16 and No = 4. Assume also that there is no population growth, saving rate s = 0.3 and 8 = 0.05. Fill in the following
table as the time progresses for this economy.
Time
Capital per worker
Output per worker
Consumption per worker
Investment per worker
Depreciation per worker
[ Select]
lo
4
0.7
7
0.3
1
[ Select ]
[ Select]
[ Select)
[ Select]
[ Select ]
2
[ Select]
[ Select]
[ Select]
[ Select]
[ Select]
...
[ Select]
[Select]
[ Select]
[ Select]
[ Select)
c. What are the steady-state values for capital per worker, output per worker, consumption per worker and investment per worker for this economy? Without
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