EBK MACROECONOMICS (FOURTH EDITION)
4th Edition
ISBN: 9780393616125
Author: Jones
Publisher: YUZU
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Chapter 5, Problem 9E
(a)
To determine
The growth rate of per capita GDP as a function of the growth rate of the capital stock.
(b)
To determine
The solution to growth rate of per capita GDP as a function of current level of Kt.
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Students have asked these similar questions
All values are 2005 dollars.
Part a) Calculate the growth of GDP/capita in each column.
Part b) Calculate the average annual growth in GDP/capita for japan, uk, and USA from 1980 to 2010 using the growth formula in the image. In the growth function, t is the current time period, t-j is the original time period, and g is the annual growth rate.
Part c) In parts a and b, are the calculated values for nominal gdp/capita or real gdp/capita. Explain why.
In the Solow Growth Model, a country's production function is defined by the following:
Y = F (K/L) = kºs
Where K is capital and I. labour; labour grows at a rate (n), and the economy faces depreciation at a
rate (8)
The initial Capital Stock per worker: k, = 9 units
The savings rate: s = 0.20
and the rate of depreciation: a = 0.1
Using equations and identities from the Solow Growth Model, calculate the level of capital
k, Output y, Consumption c, depreciation and change in capital from the equation of motion for
periods 1, 2 and 3. Comment on the accumulation of capital and output over the three periods.
GDP per capita in the United States was approximately $63,000 in 2020. Use the growth formula (see below) to answer the following questions:
Growth formula: (future value) = (present value) × (1 + r)t
present value = this year's GDP per capita
future value = GDP per capita in the future
r = rate of growth (in decimal form) per year
What will GDP per capita be in the year 2025 if it grows each year by 2.5 percent?
Chapter 5 Solutions
EBK MACROECONOMICS (FOURTH EDITION)
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