In the absence of technological progress, an increase in the saving rate will affect which of the following variables in the long run in the Solow model? output per worker capital per worker the level of investment all of the above
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- For which of the following does the Solow model NOT provide adequate explanation? O a. Why saving rates differ across countries *b. All of these answers are correct Oc. Why population growth rates differ across countries The case ai productivity differences across countries What causes long-term economic growth6. Using the Solow Model, determine graphically, the steady state for capital and output when there is an: (a) a permanent decrease in the savings rate (b) a permanent decrease in A (c) a permanent increase in the depreciation rate.In the Solow model, if investment per-worker initially exceeds saving per-worker, how isthe steady-state capital per worker reached? Draw a graph to support your answer
- Explain the Solow Model when there is an improvement of technologyQUESTION 22 whereas in the Solow model In the Romer model, the balanced growth path is equal to OAG-A; the steady-state level of capital is zero OB.0; infinity ; the growth rate declines as economy approaches the steady state O D. the level of the number researchers in an economy; capital is scarce OE. g=lL: there is a steady state G H. K. V. M Control Alt 無要換 AltLet the production function be Q = K0.®L0.2 Solow's assumptions are K = sQ – 6K The symbols s represents a (constant) marginal propensity to save, n, a (constant) rate of growth of labor and 8 constant depreciation rate. (a) Derive the fundamental equation of Solow growth model for given production function. (b) Sketch graph of with k on the vertical axis and k on the horizontal take n = 0.01, s = 0.3, 8 = 0.1.
- In the Solow economic model, id like to know the relationship between the rate of population growth and the steady state level of income. I know that when the rate of population growth grow, then the breakeven investment line goes up, which decreses investment and capital per worker, but what does it do to the income level and the steady state rate of growth?3 pts in the Solow model, the economy reaches a steady-state because as capital per worker increases O savings per worker is constant, while the population growth rate is contare and the depreciation rate of capital decen, ing that the economy w gro endogenously while the population growth rate and the depreciation rate of capital are comitant implying that the economy will converge to a sady O marginal savings per worker diminishes, while the population growth rate and the depreciation rate of capital are constant implying that the economy will gro endogenously Osaving perv state. O marginal savings per worker diminishes, while the population growth rate and the depreciation rate of capital are constant, implying that the economy will converge to a steady-stateYIN CN Next question Suppose that the production function is given by Y- 05VR N 454 where Y is output, Kis capital, and N is the number of workers 4 Suppose that 60 05 With your favonte spreadsheet software, compute steady-state output per worker and steady-state consumption per worker for s 0, 801, a02, s1 Graph the steady-state level of output per worker and the steady-state level of consumption per worker as a function of the saving rate 25 1) Using the multipoint curve drawing tool, drawa curve showing the relationship between YIN and the saving rate. Properly label your curve 15 2) Using the multipoint curve drawing tool, draw a curve showing the relationship between CIN and the saving rate. Properly label your curve 0.5 Although the control ponts for your multpownt curves do not have to be exact try to plot them as accurately as possible 01 02 03 a'4 os o6 07 os 09 Saving rate, At what saving rates are YIN and CIN maximized? After plotting the final point of your multipoint curve…
- Assuming an economy is at steady state, with the use of an appropriate diagram withdescriptions illustrate the impact of a reduction in the saving rate on capital perworker and output per worker.Assume that a country's per-worker production is y = k1/2, where y is output per worker and kis capital per worker. Assume also that 10 percent of capital depreciates per year (= 0.10) 2 andthere is no population growth or technological change.a. If the saving rate (s) is 0.4, what are capital per worker, production per worker, andconsumption per worker in the steady state?b. Solve for steady-state capital per worker, production per worker, and consumption perworker with s = 0.6.c. Solve for steady-state capital per worker, production per worker, and consumption perworker with s = 0.8.d. Is it possible to save too much? Why?In the Solow growth model:1. Write the expression for consumption per capita in the steady-state equilibrium, asa function of capital per capita.2. What is the golden rule quantity of capital per capita ? Specifically, tell me thedefinition of this concept, and then relate it to the equation for the equilibriumconsumption per capita whose expression answers question (1) above.23. How do we find the golden rule savings rate, once we know the golden rule quantityof capital per capita?