Q. Suppose people invest more on their education. Evaluate the consequence of increasing valuation of education on economic growth refer to the production function of y = AK^a (qL)^(1-a). Where Y= economic growth, K=capital, L=Labor q=education
Q: Four of the determinants of economic growth relate to supply side, i.e. the physical ability of the…
A: Economic growth is defined as an increase in the production of economic goods and services in an…
Q: Assume that a economy holds two factors of production, human capital managed by native-born workers…
A: Human-capital is actually the quality of the overall workforce. Quality is usually defined as the…
Q: The great 18th century economist Adam Smith wrote “Little else is requisite to carry a state to the…
A: Adam Smith believed in laissez-faire policy which implies that the economy will work efficiently and…
Q: Discuss the assumptions underlying Classical growth theory. Explain the process of emergence of…
A: Growth theory: This theory comes into existence when there is industrial revolution. With the help…
Q: describe the process by which a decrease in income taxes impacts economic growth.
A: The aggregate output function, as well as the labor demand and supply curves, decide the direction…
Q: The catch-up effect says that countries with low income can grow faster than countries with higher…
A: According to the catch-up effect theory , the low income eating countries will grow and will finally…
Q: Why are the factors of production (land, capital, labor, entrepreneurship) important to economic…
A: Land, labor, capital, and entrepreneur are very important factors of production for economic growth.…
Q: True or false? If false, explain why.a. Technological advance, which to date has played a relatively…
A: a. Technological progress is the main factor that helped the US economy to grow and develop faster…
Q: In the endogenous growth model presented in the text, suppose that u represents the fraction of time…
A: To find : Growth rate of consumption.
Q: Suppose that , z the marginal product of efficiency units of labor, increases in the endogenous…
A: The theory that depicts that there is the generation of economic growth within a system due to the…
Q: Country A and Country B initially have the same real GDP per capita. Country A experiences no…
A: GDP refers to the value of final goods and services produced in an economy. Real GDP is the value of…
Q: In the endogenous growth model of chapter 8, suppose that there are three possible uses of time. Let…
A: The endogenous growth models are based on the theory that, endogenous factors are the primary cause…
Q: Which of the following statements is FALSE? 1. Labor productivity and the percentage of people…
A: Labor productivity refers to the amount of output produced or the value of the production by each…
Q: The benefits of economic growth, particularly as measured by real GDP per capita, include greater…
A: Answer -1 For the vast majority of people, the benefits of economic expansion as measured by Real…
Q: For each of the following policies, determine which factor of growth that the policy is related to.…
A: This policy is related to the "natural resources". Since in a country the stock of natural resource…
Q: Many countries, including Pakistan, import substantial amounts of goods and services from other…
A: a) It is totally true that if a nation produces more of goods and services, then the standard of…
Q: Which one of the following is not a determinant of productivity? A greater stock of labor. More…
A: In a market, all the variables thate lead to change the output level and ability of the input…
Q: As formulated by Malthus, the Malthusian theory of population growth, proved ______. a. that food…
A: Malthusian theory of population growth says that the population is increasing at the rapid speed…
Q: Many countries, including Pakistan, import substantial amounts of goods and services from other…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: Which of the following countries would be more likely to experience strong economic growth, other…
A: Economic growth means an increase in the total production of goods and services in a given year in…
Q: Suppose the 50% of the income generated by an economy is paid to workers, thus implying that the…
A: 50% of the income generated by an economy is paid to workers. It means labor share of income is 0.5…
Q: Suppose that the economy's production function is Y = √K√LA where K is capital, L is labor, and A is…
A: Production function : Y = (K)0.5 (LA)0.5 To find the steady state we convert above production…
Q: As economic growth models become more and more inclusive of realistic conditions and incorporating…
A: Answer-
Q: 1. If the saving rate s=80 percent, the steady state level of output per unit of effective labor at…
A: In economics, a production function gives the technological relation between quantities of physical…
Q: Kindly discuss and explain in detail the following: What is the focus of Leontief paradox? How is…
A: Leontief's Nobel Prize research focused on input-yield analysis, which breaks down the sectors of…
Q: 1. Let F(K, AN) denote a production function that satisfies constant returns to scale. For an…
A: Given production function Y=f(K,AN) Labor augmented production function Y--- output K--- capital…
Q: The current population of the United States is 327.2 million with 2.2% of the population is engaged…
A: Efficiency Rate The amount of work or energy saved in a process is measured by efficiency. Work or…
Q: 1.Many countries, including Pakistan, import substantial amounts of goods and services from other…
A: (a) It is totally true that if a nation produces more of goods and services, then the standard of…
Q: Using the production function Real GDP = T (L, K), and the LRAS curve, describe the process by which…
A: The economics as a study is based upon the basic idea that the resources which are present with the…
Q: Which of the following situations is not a macroeconomic objective? a. economic efficiency b.…
A: Desclaimer , You posted the multiple questions , we are supposed to solve the 1st questions only .…
Q: Suppose some of the country's capital is suddenly destroyed. If the depreciation rate, savings rate,…
A: Suppose some of the country's capital is suddenly destroyed. If the depreciation rate, savings rate,…
Q: Which of the following explains the importance of education in economic growth? Group of answer…
A: Economic growth means an increase in the total production of goods and services in the economy. It…
Q: Which of the following is most likely to contribute toeconomic growth as measured by GDP per capita?…
A: Economic growth: Economic growth is represented by an increase in the production of the goods and…
Q: Farmland is a developing country with the following production function: Y = 24L2/3K1/3 with Y =…
A: The production function is that function which shows the relationship between output produced by the…
Q: Why is a Cobb-Douglas production function useful for analyzing economic growth?
A: Economic growth is defined as an increase or improvement over time in the inflation-adjusted market…
Q: Assume that a country's production function is Y = K/2*L/2 and there is no population growth or…
A:
Q: Assume that a country's production function is Y = K/2*L/2 and there is no population growth or…
A: Production function = Y = F(K,L) = K^(1/2) * L^(1/2) Per worker production function = Y/L = F(K/L,…
Q: Which of the following causes sustained economic growth? Diminishing returns Increases in…
A: Economic growth occurs when there is an increase in real output over time. This measured by gross…
Q: Which of the following statements about y=Ak growth models is false? a) They assume the production…
A: The Y=AK growth model is an endogenous growth model whose main property is that of the absence of…
Q: Assume a hypothetical society that decides to reduce consumption (production of consumption goods)…
A: Production of capital goods and consumer goods in an economy should be complementary to one another,…
Q: Suppose that , the marginal product of efficiency units of labor, increases in the endogenous growth…
A: The endogenous growth model focuses on the growth and development of the economy on the basis of the…
Q: Q#13) The former Tea Party and Trump factions with the Republican Party would like…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Step by step
Solved in 2 steps
- Assume that a economy holds two factors of production, human capital managed by native-born workers and low skilled migrants. If large migration of low skilled migrants occurs, how will the influence the rate of return on human capital?Consider the economies of Hermes and Gobbledigook, both of which produce gobs of goo using only tools and workers. Suppose that, during the course of 20 years, the level of physical capital per worker rises by 4 tools per worker in each economy, but the size of each labour force remains the same. first dropdown question options are (larger or smaller), second dropdown question options are (the brain drain, inward orietned growth, diminishing returns, constant returns, increasing returns), the third dropdown question oprions are (more diffucult or easier)answer all! Consider the Endogenous Growth Model with the representative consumer. The efficiency parameter of human capital accumulation technology is b = 5. The total productivity factor is given by z = 60. Denote by Ht the human capital accumulated in period t, and by ut the time spent working in period t. Assume u0 = 0.85 and H0 = 1. 1. Compute the consumer consumption Ct for periods 0 and 1. 2. Starting from year 2, the government applies a policy that raises b to 9. Now assume that in face of this increased value of human capital in the economy, the consumer responds optimally by decreasing ut to 0.75. Calculate the consumption Ct for periods 2 and 3.
- Farmland is a developing country with the following production function:Y = 24L2/3K1/3with Y = Output levelL = Quantity of laborK = Quantity of machinesa. Find the real rate of return for labor. Show your calculation. b. Suppose Farmland is granted some extra machines for production.How would this affect the real rate of return for labor? Explain by using theresult in (a).Consider the following (made-up) statistics for some econ-omies. Assume the exponent on capital is 1/3 and that the labor composition is unchanged. For each economy, compute the growth rate of TFP.(a) A European economy: gY/L = 0.03, gK/L = 0.03.(b) A Latin American economy: gY/L = 0.02, gK/L = 0.01.(c) An Asian economy: gY/L = 0.06, gK/L = 0.15.This is an extremely simple human capital accumulation problem. Let ℎ? denote human capital of generation ? (i.e., human capital of people born in year ?). Suppose that human capital accumulates as a result of education spending, denoted by ? and measured in 1,000 US dollars. If ? = 30, the total spending is 30,000 US dollars and human capital of this individual is equal to ℎ? = 2√?Suppose that every individual has the same human capital, and output perindividual is ?? = ?ℎ?where ? > 0 is a fixed technology parameter.Find the (long-run) growth rate of ??. Show all your work, and interpret your results.
- Write the production function in its simplest form (human capital being included in TFP) and explain the nature of each factor as well the theoretical value of the parameter Alpha. In other words what does the value of Alpha represent regarding the returns of each factors of production?Labour-saving technical progress meansa) that marginal productivity of capital increases.b) that marginal productivity of labour increases.c) that marginal productivity of both inputs increases.d) None of the above is correct.In Wonderland production per worker (y) depends on capital per worker (3) such the y=10√k. Every year 15% of the capital stock depreciates, while workers in Wonderland save 10% of their income. Every year the population grows at as e of 3% (d) How might Wonderland and Neverland achieve economic growth in the long run?
- K In an attempt to account for the sources of economic growth, economists today refer to the "Solow residual" as a measure of the impact of changes in OA. physical capital. OB. the sophistication and flexibility of institutions.. OC. technology. OD. investment. OE. human capital. O Search 8 Save Clear all Check answer ^Don't use chat gpt otherwise I downvote the answer As reflected in the modeling decisions made by Lucas in his human capital model, which features of Romer's Learning-by-Doing model did Lucas find unsatisfying? Select all that apply A) it achieved sustained growth via gains in labor productivity B) Gains in labor productivity were modeled as solely from free learning-by-doing when accumulating more capital C) It failed to produce catch-up growth D) It failed to accommodate rational expectationsAssume that a country's production function is Y = K1/2L1/2 and there is no population growthor technological change.a. What is the per-worker production function y = f (k)?b. Assume that the country possesses 40,000 units of capital and 10,000 units of labor. What isY? What is labor productivity computed from the per-worker production function? Is thisvalue the same as labor productivity computed from the original production function?c. Assume that 10 percent of capital depreciates each year. What gross saving rate isnecessary to make the given capital–labor ratio the steady-state capital–labor ratio? (Hint:In a steady state with no population growth or technological change, the saving ratemultiplied by per-worker output must equal the depreciation rate multiplied by the capital–labor ratio.)d. If the saving rate equals the steady-state level, what is consumption per worker? Only D, other option answered