What effect does a depreciation of the dollar (all things being held constant) have on real GDP in the United States in the long run? A. Real GDP will be unchanged, but nominal GDP will rise. B. Real GDP will rise. C. Real GDP will be unchanged but we would expect deflation. D. Real GDP will fall.
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- (1d) To measure a real increase in wages, the changes would have to be averaged. the wages would have to be adjusted for inflation overtime. (my guess) the increase would have to be compared to the growth in GDP. (1e) Jerusha lives in a country with a large amount of protection under the law for conducting business or bringing her ideas to the market with patten production. Because of the economic conditions what will Jerusha most likely do with her rainwater collecting invention? Keep her ideas in a notebook and sell them to the highest bidder. Find a country where she can develop her idea away from strong patent laws. Develop her invention and bring it to market with ease and minimal cost. (my guess) (1f) Over the past 50 years, which component of consumer spending has steadily gained as a percentage of the total? durable goods nondurable goods services (my guess) (1g) The distinction between real GDP and nominal GDP is important to determine which of the following? The…How can these economic indicators that are affected by the government's fiscal policy, monetary and international trading policies be resolved?Nominal Fixed InvestmentsGovernment CobsumptionAgriculture EmploymentWhat could have caused an increase in net national product? a. Low GNP and high depreciation b. Low GNP and low depreciation c. None of the choices d. Higher GNP and lower depreciation
- How do these economic indicators are affected by the government's fiscal policy, monetary and international trading policies:Nominal Fixed Investments Government Consumption Agriculture EmploymentConsider an competitive economy with interest rate r =MPK=0.05,capital depreciation rate o = 0.03, technology growth rate g = 0.03, and populationgrowth rate n = 0.02(1) Why should we be interested in the Golden Rule steady state of an economy? (2) Is the economy depicted above running on its Golden Rule steady state? If yes,explain how you get your answer. If no, what should the government do to achievethe Golden rule steady state?(3) It is said that the Golden Rule steady state gives the greatest growth rate of consumption per capita. True or False? Explain your answer.(4) It is said that population is usually a burden to economic growth. So if we canreduce the population growth rate from n = 0.02 to n = 0.01, everyone will be betteroff, in the sense of enjoying greater growth rate of consumption in the new GoldenRule steady state. True or False? Explain your answer.Suppose the savings rate suddenly decreases. We an assume that real growth will ------ in the short run and the steady state capital will------. -decrease, decrease -decrease, increase -increase, decrease -increase, increase
- Cañital stick for a country is $1600 billuon at the beginning of the year. Gross investment year is 20 billion and depreciation is 30 billion capital stock st the end og the year isFor this question, assume that all price levels are fixed. Now suppose that there is a real depreciation. This real depreciation will cause which of the following to occur? Question 4Answer a. None of the answers b. a reduction in exports c. an increase in imports d. a reduction in net exports e. a reduction in demand for domestic outputI have to change the savings rate, but trying to figure out how to start. Let’s work out 5 periods of a Solow model with labor augmenting productivity (Z) growth. In your toy economy, the savings rate is 10%, and the depreciation rate is 50% (the high depreciation rate will get us to steady-state faster--think of each period as a decade). The population is fixed (treat it as one worker, N=1 forever). You always start off with 1 unit of capital, and TFP = Z = 1 during the first period. Since TFP and population never change, output each period is created this way: Yt = Kt(1/3)Zt(2/3) Consider two worlds: One where labor augmenting productivity (Z) grows 20% per period, and one where labor augmenting productivity (Z) grows 10% per period Answer the following questions for each of the two worlds What is capital each year, in years 1-5? What is GDP each year, in years 1-5? What is the marginal product of capital each year (MPK) in years 1-5? What is the wage in each period? In a steady…
- "During a recession more people qualify for unem ployment insurance . This will increase the government spending category of GDP and help reduce the sever ity of the recession " Do you agree with this statement ? Why or why notIn a hypothetical economy, real GDP is $10 trillion, investment is $2 trillion, the capital stock is $20 trillion, the depreciation rate is 4.5% and the labor supply growth rate is 1%. Which statement is correct? Capital per worker is increasing in this economy Aggregate demand is decreasing in this economy Aggregate demand is increasing in this economy Capital per worker is decreasing in this economyAt k*(GOLD), when population growth and depreciation are non-zero, what is true? a. MPK = depreciation + population growth b. MPK = population growth + capital growth c. MPK = depreciation + capital growth d. MPK = depreciation + population growth + capital growth
