Using the one-period closed economy model, show graphically the effects of a decrease in government spending on consumption, leisure, real wage rate, output, labour demand, labour supply.
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Using the one-period closed economy model, show graphically the effects of a decrease in government spending on consumption, leisure, real wage rate, output, labour
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- Why is the golden rule steady state preferred to the initial steady stateAccording to investopdia.com,a steady-state economy is an economy structured to balance growth with environmental integrity, seeking to find an equilibrium between production growth and population growth. This type of economy aims for the efficient use of natural resources but also seeks a fair distribution of the wealth generated from the development of those resources. Is this type of economy more plausible than continued, unlimited economic growth? Why or why not?In the Malthusian model, suppose that the quantity of land increases. Using diagrams, determine what effects this has in the long-run steady state and explain your results.
- In order to improve living standards for future generations, the economy must sacrifice consumer goods today reduce its investment goods increase government spending reduce growth in the populationAccording to economists, productivity can be increased by Group of answer choices - improving the education of workers - raising minimum wages - raising union wages - restricting trade with the foreign countriesThe Golden Rule level of capital accumulation is the steady state with the highest level of consumption. Illustrate this statement showing well where the economy would move if it were to move to a new steady state.
- Suppose an economy begins in steady state. By what proportion does per capita GDP change in the long run in response to each of the following changes? (a) The investment rate doubles (b) the depreciation rate falls by 10% (c) The productivity level rises by 10% (d) an earthquake destroys 75% of the capital stock (e) A more generous immigration policy leads the population to double.Based on the Neoclassical Growth Model explain in detail what are the critical determinants of economic growth. Also, specify related assumptions.Using the slow growth model, a higher savings rate produces a temporary increase in the growth rate, but not a permanent increase True False
- “The Sollow model shows that the saving rate does not affect the growth rate in the long-run, so we should stop worrying about the low US saving rate. Increasing the saving rate wouldn’t have any important effects on the economy.” Explain why you agree or disagree with this statement. Structured response required.A broader definition of macroeconomics and its relationship with the level of production, unemployment and inflation of a country.what is the "Old Growth Theory," and what role does it play in Macroeconomic policy?