If output is $7500, the level of capital is 600, capital's share of total income is 0.6, and the price of output is $4, then what is the nominal rental rate given the neoclassical theory of distribution holds?
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- Specific Subject: Macroeconomics - Basic Neoclassical Model This problem indicated At (exogenous variable represents as Technology as looks at Cobb-Douglas production functions). This problem indicated At (exogenous variable represents Technology as can be seen in various Cobb-Douglas type production functions).Then, the objective is to model 2 graphs considering 2 labour offers - one relatively elastic and the other inelastic -, and to analyse the effects of variables such as Yt (output), rt (interest rate), wt (nominal wage) and Nt (labour) and how they are impacted by these offers and thus explain what happens to the real wage. This problem was sent 2 times, but due to the complexity it was rejected. I urgently need a resolution.Suppose an economy's production is defined by the following neoclassical production function: Y=3K1/3L2/3. Derive the labor demand equation by expressing labor, L, as a function of the real wage, w=W/P Don't answer by pen paper and don't use chatgpt otherwise we will give dounvoteThe neoclassical consumption model, a retirement perspective: Consider thespecial case solved in the text where ! = 1 and utility takes the log form.Suppose the real interest rate is 5 percent. Let’s give this consumer a fnancial profle that might look like that of a middle-aged college professor contem-plating retirement: initial assets are ftoday = $50,000, and the path for labor income is ytoday = $100,000 and yfuture = $10,000.(a) What is the individual’s human wealth? Total wealth?
- Use the neoclassical theory to predict the impact on i) the real wage and ii) the real rental priceof capital of each of the following events:a) A wave of immigration increases the labor force.b) An earthquake destroys some of the capital stock.c) A technological advance improves the efficiency of production.In an economy, if structural unemployment decreases while theother types of unemployment remain unchanged, then (circle theletter representing the right answer below)A) the natural rate of unemployment and potential GDP willremain unchanged.B) the natural rate of unemployment and potential GDP will bothdecrease.C) the natural rate of unemployment will increase and potentialGDP will decrease.D) the natural rate of unemployment will decrease and potentialGDP will increasef) In words, discuss the limitations of the neoclassical analysiswith respect to closing a recessionary gap.Neoclassical Production Function Please explain the theoretical value of the parameter Alpha in other words what does the value of Alpha represent?
- Explain how the income from production is distributed to labor and capital according to the neoclassical theory of distribution.What is the neoclassical explanation for the natural rate or the NAIRU? What does neoclassical theory say about income distribution and inequalityExplain what is meant by ‘macroeconomics’ and why some economists think that it is different to standard neoclassical economics. explain with graphs please.
- 7. Consider a neoclassical growth economy described by the following.•Yt = K0.3t ·L0.7t (aggregate production function)•s = 0.35 (saving rate)•δ = 0.10 (depreciation rate)•n = 0.01 (population growth rate)•L1 = 120 (initial population)•K1 = 160 (initial capital stock)•g = 0 (technological growth rate)Compute K, Y , k, y, and c for the first three periods. Please report numerical answers to two decimal points.1. An economy's firms produce goods along the Cobb-Douglas production function: Y = A * K^0.5 * L^0.5 For it, the marginal product of a worker is MPL = 0.5 * A * K^0.5 / L^0.5, in which K = 16 Workers bargain for wage by looking at the rate of unemployment and inflationary surpise: w = 2 * EP/P *L^0.5 K = 16. The economy is in equilibrium at EP=P=1 and A=9. In it, the number of workers is L=9 and the wage is =6. Now, thanks to temporarily abundant oil, the productivity changed from A=9 to A=16. Find the new equilibrium number of workers. 2. Find the new equilibrium wage at A=16. 3. Graph the change in the labor market equilibrium. Mark the before and after equilibria with E0 and E1. Label axes and curves, map relevant values onto axes.Explain the differences and similarities between Neoclassical Growth and New Keynesian models based on:1. Economic Actors2. Assumption of Market Type
