QUESTION 8 Assume that an economy experiences both positive population growth and technological progress. Once the economy has achieved balanced growth, we know that growth rate of K/AN is O GA + 9N. 9A 9N. 0. 9A none of these
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- What are the advantages of backwardness for economic growth?What do the growth accounting studies conclude are the determinants of growth? Which is more important, the determinants or how they am combined?An economy starts off with a GDP per capita of 5,000. How large will the GDP per capita be if it grows at an annual rate of 2 for 20 years? 2 for 40 years? 4 for 40 years? 6 for 40 years?
- on 8. From the following countries, which had the highest average annual rate of growth of real GDP since 1960? A) United Kingdom B) South Korea C) Canada D) United States OD OA O C OB EAssume that an economy experiences both positive population growth and technological progress. Once the economy has achieved balanced growth, we know that the capital per effective worker ratio (K/NA) is 1. growing at a rate of δ + gA + gN. 2. growing at a rate of gA + gN. 3. growing at a rate of gN. 4. growing at a rate of gA. 5. none of the aboveCountry Has Cobb-Douglas production function: Y(it) = A(it) x K(it)1/3L(it)2/3 Where: Y(it) = realGDP K(it) = Capital L(it) = No. workers employed in country (i) on date (t) Suppose multiple countries share the same alpha = 1/3 but different levels of totalfactorproductivity (A(it)). How would one calculate the average annual growth rate of totalfactorprodctivity of each country
- Assume there is a second economy ( country B ) with everything identical to country A except for the rate of population growth , which is 2 percent . Answer the following questions for country B. Assume both countries start a k = 0 , which country grows more in the short run ( before steady state is reached ) , as given by the rate of growth of output per worker ? ( hint : the further away from steady state , the faster the growth towards it ). O. Country A O. Same for both O. Country BSweden and Norway are two neighboring countries in Northern Europe with similar savings rates, population growth rates, technology growth rates, and depreciation rates. However, Norway differs from Sweden in that Norway has large deposits of oil all along its coast, which makes it very easy for Norway to produce large quantities of crude oil every year with relatively little capital and labor. a) Draw a Solow Growth diagram that compares Sweden and Norway. What is the main difference between the two countries in the diagram? b) According to the Solow Growth Model, which country would have a higher standard of living in the long run? Which country would have a higher growth rate of its standard of living in the long run? c) Suppose now that, in the long run, oil becomes obsolete and has no value because it is uneconomical relative to renewable energy sources like solar and wind power. What would this do to your Solow Growth diagram in part a? How would the standard of living in Norway…2. Suppose we are considering a Solow Model without technology progress. Y=K3/4L1/4 Population growth rate=0.03 The capital accumulation is sY-dK s=0.2, d=0.07 Please calculate the capital per capita under the steady state. A. 20 B. 24 C. 8 D. 4 E. 12 F. 16 2-1. Please calculate the marginal product of labor at the steady state. A. 2 B. 1/2 C. 4 D. 8 E. 1 F. None is correct.
- Assume 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 answeredAssume 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?Explain the basic theory of Solow Growth model, highlight the production function and basic assumptions of Solow Growth model. Show the steady-state condition. [Use the production function: = ?? 1/3? 2/3 ]