Assume the following: The economy’s production function is Y = F(K,L,) = K^(1/4)L^(3/4) The saving rate...
Assume the following:
The economy’s production function is Y = F(K,L,) = K^(1/4)L^(3/4)
The saving rate is 0.32 (32 percent).
The depreciation rate is 0.04 (4 percent).
The rate of population growth is 1 percent per year.
What are the golden rule steady–state values of k, y, and c? show all work.
Homework Answers
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Assume the following:
The economy’s production function is Y = F(K,L,) =
K^(1/4)L^(3/4)
The saving rate...
1) Assume that a country's production function is Y = AK 0.3 L 0.7 (and MPK...
1) Assume that a country's production function is Y = AK 0.3 L 0.7 (and MPK = 0.3 Y/K ) The ratio of capital to output is 3, the growth rate of output is 3 percent, and the depreciation rate is 4 percent. Assume the economy is in a steady state. a.Write down the steady state condition and calculate the saving rate for this steady state. b.Write down the Golden Rule for this economy. Is this economy in the Golden...
a）Assume that country A has the following production function Y=K^0.3 L^0.7 Its saving rate is 20%...
a）Assume that country A has the following production function Y=K^0.3 L^0.7 Its saving rate is 20% per year. The depreciation rate is assumed to be 5% per year. What is the steady state level of capital stock per capital, K*？What is the steady state level of output per capital, Y*? What is the steady state level of c*? Show the results in a suitable diagram. b) At year 1,K=6. Is this a steady state? Find out the values of GDP...
2. A country has the following production function: Y = 0.3L0.5p0.2 where Y is total output,...
2. A country has the following production function: Y = 0.3L0.5p0.2 where Y is total output, K is capital stock, L is population size and P is land size (P is a fixed number). The depreciation rate (8) is 0.05. The population growth rate (n) is 0. The saving rate is 0.2. We define: y = Y/L, K = K/L and p = P/L. Use: Ak = sy - (n + )k. a) Find out the steady state values of...
4. (a) Consider an economy with production function Y-F(K.L)-VK -depreciation of capital=16% -saving rate-24% L population...
4. (a) Consider an economy with production function Y-F(K.L)-VK -depreciation of capital=16% -saving rate-24% L population growth-2% (i) if K-196 and L-100 in the cuIrent period. find ^ + and periods. 11) Find the steady state levels of-.-.and-. in the current and the next (b) Find the answers in (a) if the saving rate is changed to 30%. (c) Find the answers in (a) if the production function is changed to Y-F(K.L)-1.08-VKL
Suppose an economy described by the Solow model has the following production function: 1/2 1/2 Y=K...
Suppose an economy described by the Solow model has the following production function: 1/2 1/2 Y=K (LE) . a. For this economy, what is f(k)? b. Use your answer to part (a) to solve for the steady-state value of y as a function of s, n, g, and ?. c. Two neighboring economies have the above production function, but they have different parameter values. Atlantis has a saving rate of 28 percent and a population growth rate of 1 percent...
5. (25 points) Consider an economy described by the production function: Y - F(K, L) K//3,...
5. (25 points) Consider an economy described by the production function: Y - F(K, L) K//3, and the depreciation rate is 3 percent. a. Please find the Golden Rule level of capital. b. What is the saving rate that is necessary to reach the Golden Rule level?
Assume that a country's production function is Y = AKO.3_07 (and MPK = 0.3 YIK) The...
Assume that a country's production function is Y = AKO.3_07 (and MPK = 0.3 YIK) The ratio of capital to output is 3, the growth rate of output is 3 percent, and the depreciation rate is 4 percent. Assume the economy is in a steady state. 21. Write down the steady state condition and calculate the saving rate for this steady state. 22. Write down the Golden Rule for this economy. Is this economy in the Golden Rule steady state?...
1.Consider the following production function: Y = KθL1-θ, where the labor (L) is growing at the...
1.Consider the following production function: Y = KθL1-θ, where the labor (L) is growing at the rate n = 0.03 every year. The capital stock (K) is depreciating at a rate δ = 0.05 annually. The value of θ is 0.62).The saving rate is equal to 40%. The government imposes a proportional tax rate τ on y. Thus, the disposable income is equal to (1 - τ)y only. Let y = Y/L and k = Y/L. a) Please transform the...
Consider an economy described by the production function: Y = F(K, L) = (0.25 0.75 a....
Consider an economy described by the production function: Y = F(K, L) = (0.25 0.75 a. What is the per-worker production function? y= b. Assuming no population growth or technological progress, find the steady-state capital stock per worker (k*), output per worker (y*), and consumption per worker (c*) as a function of the saving rate and the depreciation rate. k* = y* =
4. (a) Consider an economy with - production function Y-F(KL)-VK.L -depreciation of capital-16% -saving rate-24% population...
4. (a) Consider an economy with - production function Y-F(KL)-VK.L -depreciation of capital-16% -saving rate-24% population growth=2% G) if K-196 and L-100 in the eurent period, find T T andT in the eurent and the next periods. (ii) Find the steady state levels of ^. ^. and (b) Find the answers in (a) ifthe saving rate is changed to 30%. (c) Find the answers in (a) if the production function is changed to Y=F(KL)-1.08.,K·L.
2. A country has the following production function: Y = 0.3L0.5p0.2 where Y is total output, K is capital stock, L is population size and P is land size (P is a fixed number). The depreciation rate (8) is 0.05. The population growth rate (n) is 0. The saving rate is 0.2. We define: y = Y/L, K = K/L and p = P/L. Use: Ak = sy - (n + )k. a) Find out the steady state values of...
4. (a) Consider an economy with production function Y-F(K.L)-VK -depreciation of capital=16% -saving rate-24% L population growth-2% (i) if K-196 and L-100 in the cuIrent period. find ^ + and periods. 11) Find the steady state levels of-.-.and-. in the current and the next (b) Find the answers in (a) if the saving rate is changed to 30%. (c) Find the answers in (a) if the production function is changed to Y-F(K.L)-1.08-VKL
5. (25 points) Consider an economy described by the production function: Y - F(K, L) K//3, and the depreciation rate is 3 percent. a. Please find the Golden Rule level of capital. b. What is the saving rate that is necessary to reach the Golden Rule level?
Assume that a country's production function is Y = AKO.3_07 (and MPK = 0.3 YIK) The ratio of capital to output is 3, the growth rate of output is 3 percent, and the depreciation rate is 4 percent. Assume the economy is in a steady state. 21. Write down the steady state condition and calculate the saving rate for this steady state. 22. Write down the Golden Rule for this economy. Is this economy in the Golden Rule steady state?...
Consider an economy described by the production function: Y = F(K, L) = (0.25 0.75 a. What is the per-worker production function? y= b. Assuming no population growth or technological progress, find the steady-state capital stock per worker (k*), output per worker (y*), and consumption per worker (c*) as a function of the saving rate and the depreciation rate. k* = y* =
4. (a) Consider an economy with - production function Y-F(KL)-VK.L -depreciation of capital-16% -saving rate-24% population growth=2% G) if K-196 and L-100 in the eurent period, find T T andT in the eurent and the next periods. (ii) Find the steady state levels of ^. ^. and (b) Find the answers in (a) ifthe saving rate is changed to 30%. (c) Find the answers in (a) if the production function is changed to Y=F(KL)-1.08.,K·L.
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