Macroeconomics (9th Edition)
9th Edition
ISBN: 9780134167398
Author: Andrew B. Abel, Ben Bernanke, Dean Croushore
Publisher: PEARSON
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Question
Chapter 6, Problem 5NP
a)
To determine
To describe: The steady state values of capital-labor ratio, output per worker and consumption per worker is to be calculated.
b)
To determine
To describe: The steady state values of capital-labor ratio, output per worker and consumption per worker is to be calculated with saving rate 0.4 instead of 0.3.
c)
To determine
To describe: The steady state values of capital-labor ratio, output per worker and consumption per worker is to be calculated with 0.8 population growth rate.
d)
To determine
To describe: The steady state values of capital-labor ratio, output per worker and consumption per worker is to be calculated with following production function −
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Students have asked these similar questions
If the share of GDP used for capital goods is 0.3,
the growth rate of productivity is 0.01, the growth
rate of population is 0.04, the depreciation rate is
0.05, the initial capital/output ratio is 0.53, and the
elasticity of GDP with respect to capital is 0.1, then
what is the growth rate of the GDP per capita? Use
three decimal places.
Please show worked solution, thank you very much
Use the following table to find the steady-state values of
the capital-labor ratio and output if the per-worker production
03
function is y=2k
S
Saving rate
8
Depreciation rate
n Population growth rate
A
Technology
0.35
0.02
0.06
2
k* = Steady-state capital-labor ratio =
y*= Steady-state output =
(Round your responses to two decimal places.)
CHILD
Output, Investment, and Depreciation
Capital-Labor Ratio
Output
Depreciation
Investment
After plotting the final point of your multipoint curve, press
the Esc key on your keyboard to end the line
Q
1. A country has the per-worker production function:
Yt =
6k/3
where y, is output per worker and k, is the capital-labor ratio. The depreciation rate is 0.1 and the
population growth rate is 0.1. The saving function is
S; = 0.1Y,
where S, is total national saving and Y, is total output.
a) What is the steady-state value of capital-labor ratio?
b) What is the steady-state value of output per worker?
c) What is the steady-state value of consumption per worker?
Answer:
2. What happens in the steady state to the capital-labor ratio, output per worker, and consumption per
worker when each of the following events occur? You should assume that the steady-state capital-labor
ratio is below the Golden Rule level.
k
y
a) Productivity falls
b) Population growth falls
c) The saving rate falls
d) The depreciation rate falls
Chapter 6 Solutions
Macroeconomics (9th Edition)
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