Draw a graph with the following elements: A Solow growth (Y) function where Y= square root of K An investment (I) function where I = % * Y A depreciation (D) function where D = % * K
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Draw a graph with the following elements:
- A Solow growth (Y) function where Y= square root of K
- An investment (I) function where I = % * Y
- A
depreciation (D) function where D = % * K
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- Derive the Equation of Motion for Solow growth Model and discuss the break-even level of investment.Graphically illustrate the traditional view of the long-run impacts of a debt-financed tax cut on: a. saving, investment, and real interest rate using the classical model (Chapter 3). b. steady state capital per worker and output per worker using the Solow growth model.3. In the Solow model, ________ is assumed to be constant. capital accumulation investment rates depreciation consumption
- 1. In the Solow model, if investment (I=sY) is lower than depreciation (dK), then…. A. Depreciation (dK) in the following period will be higher than in the current period. B. Capital stock (K) in the following period will be lower than in the current period. C. Per-capita GDP (y) in the following period will be the same as in the current period. D. Overall GDP (Y) in the following period will be higher than in the current period. The answer is B - - Can you show work for it, graph the representation for itSuppose some of the country's capital is suddenly destroyed. If the depreciation rate, savings rate, and production function remain unchanged, then the real growth rate will _____ in the short run and the steady-state level of capital will _____ increase, decrease, or stay the same?To promote long-run growth, the primary economic function of the financial system is to: Group of answer choices keep interest rates low. provide expert advice to savers and investors. match one person’s consumption expenditures with another person’s capital expenditures. match one person’s saving with another person’s investment.
- What is the direct or indirect relationship between Consumption behavior and the Solow Growth Model? Please include any important equations.6. The Solow model assumes: the capital stock is constant the number of workers is growing the number of workers is constant the saving rate changes each period the depreciation rate changes each periodGiven a saving rate of 6%, a depreciation rate of 1%, and a production function in which y = k0.5 where y is output per worker and k is capital per worker, calculate the steady state values for capital per worker, output per worker, consumption per worker, and Calculate the golden rule steady state level of capital Assuming an economy is at steady state, with the use of an appropriate diagram with descriptions illustrate the impact of a reduction in the saving rate on capital per worker and output per worker. In the context of the Solow model, illustrate with appropriate descriptions the impact of increased migrant workers on capital per worker and output per worker in an economy.
- Consider a numerical example of the Solow model: Assume that n=0.2 s=0.3 d=0.1 F(K,N)=K12N12 Initially, in period t=0, that z=3 N=1 and the economy is in a steady state: Suppose that at t=1, total factor productivity falls to z=1 and then returns to z=3 for periods t=2,3,4.... What is the value of per person aggregate output at period t=1?The saving rate (gross domestic saving as a % of GDP) in Australia, a small open economy, was 15% in 2011 while the investment rate (domestic investment as a % of GDP) was 25%. As a result, there was net outflow of capital from Australia in 2011. Is this true, false or uncertain? Please provide your explaination.Consider an economy A described by the production function: Y = F(K, L) = K0.3L0.7. In economy B, everything is similar to economy A, except, saving rate is 40%. Explain how steady state output per worker, consumption per worker and golden rule level of capital stock will differ from those of country A
