Question

Please answer these questions (they are all connected):

4. Consider an economy in steady state that has population growth n04, technological growth at rate g-.02, and a depreciation rate δ-.04. The savings rate is s-40 and the production function is y-vk, what is the rate of growth of aggregate output Y in steady state? A.) 2 percent (.02) B.) 4 percent (.04) C.) 6 percent (.06) D.) 10 percent (.10) E.) None of the above or we aren't given enough information to answer the question 5. (Continuing the previous question.) What is the steady-state capital-output ratio ? C.) 2 E.) None of the above or we aren't given enough information to answer the question. 6. (Continuing the previous question.) What is the steady-state growth rate of living standards in this A.) 4 percent (.04) B.) 6 percent (.06) C.) 8 percent (.08) D.) 10 percent (.10) E.) None of the above or we aren't given enough information to answer the question. 7. (Continuing the previous question.) What is the steady-state value of k? D.) 16 E.) None of the above or we aren't given enough information to answer the question. 8. (Continuing the previous question.) Where is this economy relative to the Golden Rule level of k*? A.) The economy's k is below the Golden Rule level R B.) The ec'is equal to the Golden Rule level k*GR C.) The economy's k* is above the Golden Rule level k*R D.) None of the above or we aren't given enough information to answer the question.

Answer 1

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