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 6NP
a
To determine
To calculate:Steady state values of Output per worker, Capital per worker, Consumption per worker, Investment per worker
b)
To determine
Value of capital-labor ratio required to double steady state value of output per capita, Amount of savings to achieve output per worker.
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Consider a closed economy in which the population grows at the rate of 1% per year. The per-worker production function is yt = 2.2kt^0.5, where y is output per worker and k is capital per worker. The depreciation rate of capital is 10% per year
a- Households initially consume 80% of income and save the remaining 20% of income. There is no government spending. What are the steady-state values of capital per worker, output per worker, consumption per worker, and investment per worker?
b-Suppose saving rate decreases to 10% permanently. What are the steady-state values of capital per worker, output per worker, consumption per worker, and investment per worker?
Consider an economy described by the production function: Y = F(K, L) = K^0,3L^0,7
A. What is the per-worker production function?
B. Assuming no population growth or technological progress, find the steady-state capital stock per worker, output per worker, and consumption per worker as a function of the saving rate and the depreciation rate.
Suppose that the production function is Y = 10 ( K )^1/4 ( L )^3/4 and capital lasts for an average of 50 years . Assume that the rate of growth of population equals 0 and saving rate s = 0.128 .
a. Calculate the steady - state level of capital per worker , output per worker , consumption per worker , saving and investment per worker , and depreciation per worker
b. Suppose that initial level of capital per worker is 100 , explain the moving process to the steady state . c . Use relevant graph to demonstrate .
Plsss provide detailed answers, thank you
Chapter 6 Solutions
Macroeconomics (9th Edition)
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