Many demographers predict that the UnitedStates will have zero population growth in thetwenty-first century, in contrast to average popu-lation growth of about 1 percent per year in thetwentieth century. Use the Solow model to fore-cast the effect of this slowdown in populationgrowth on the growth of total output and the growth of output per person
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Many demographers predict that the UnitedStates will have zero population growth in thetwenty-first century, in contrast to average popu-lation growth of about 1 percent per year in thetwentieth century. Use the Solow model to fore-cast the effect of this slowdown in populationgrowth on the growth of total output and the growth of output per person. Consider theeffects both in the steady state and in the transi-tion between steady states.
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- Consider the Solow Model with no population or technological growth. Suppose that two countriesare identical except that in Country A the depreciation rate is greater than the depreciation rate inCountry B.a. How do you compare the steady state level of capital per worker in these countries? Illustrategraphically. Explain the economic intuition for the di erences in capital per worker in steadystate.b. Which country a higher output per worker in steady state? What about investment per workerin steady state? Explain carefully.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-stateAccording to the Solow model, an increase to the savings rate will increase income per worker in the steady-state, but will have no effect on long-run growth rate of income per worker. O increase consumption per worker if and only if the new steady-state capital per worker is greater than the golden rule level of capital per worker. O increase the long-run growth rate of income per worker if and only if the new steady-state capital per worker is greater than the golden rule level of capital per worker. O increase income per worker in the steady-state and long-run growth rate of income per worker.
- 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?Consider the following numerical examples for the Solow Growth Model: Economy A z=1 s=0.5 F(K,N)=K0.3N0.7 n=0.01 d=0.1 Economy B z=1 s=0.2 F(K,N)=K0.3N0.7 n=0.01 d=0.1 In which economy is Consumption per capita higher in steady state? O Economy A O Economy B Not enough InformationQUESTION 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 Alt
- The table below shows the level of real GDP and real GDP per capita growth rates for a select set of countries for the year 2016 Determine the number of years it will take for the standard of iving to double in each country. Instructions: Round your answers to 1 decimal place. Growth Retes and the Rule of 72 Number of Years for Grouth Rate of Real GDP Standard of Living to Country Real GDP (illions) per Capita (percent) Double Canada Hadagascar Phillppines $1,597,516 0.2% 37,570 1.4 807,894 5.3 Sweden 490, 282 2.2 United States 18,624,475 0.8What is the mechanism in the Solow model that generates growth? Why isthis an appealing mechanism? Why does it fail to deliver economic growth inthe long run?Which of the following best defines 'institutions' as they relate to economic development? O The formal and informal rules governing the organization of society. O Buildings and other major structures. O Long-lasting organizations and companies. O The formal branches of government.
- Based on the notations used in class, suppose you are given the following information for the Solow growth model (with population growth and depreciation but without technological progress): y = k0.5, 8 = 0.04, n = 0.01, and s= 0.25. What is the steady-state level of k? O a. 36 O b. 15 O c. 25 O d. 5Use the Solow model with exogenous growth to answer the following. Following a reduction in the population growth rate, output per worker growth temporarily increases. O True O False The golden rule rate of saving is the rate of saving that maximizes steady state output per effective worker. O True O False The only way to increase the long-run growth rate of output per worker is to increase the growth rate of labor efficiency. O True O False Following an increase in TFP, output per worker growth temporarily declines. O True O FalseConsider the following numerical examples for the Solow Growth Model: Economy A z=1 s=0.5 F(K,N)=K0.3N0.7 n=0.01 d=0.1 Economy B z=1 s=0.2 F(K,N)=K0.3N0.7 n=0.01 d=0.1 In which economy is GDP per capita higher in steady state? O Economy A O Economy B O Not enough Information