Say an economy begins with an initial level of capital per worker, k0, that is above its steady state level of capital per worker, k*. All else equal, what will happen to output per worker and capital per worker?
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Say an economy begins with an initial level of capital per worker, k0, that is above its steady state level of capital per worker, k*. All else equal, what will happen to output per worker and capital per worker?
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- Why does adding capital to a production function make the economy more productive? What are diminishing returns to capital? How does technology affect productivity and growth?What happens in the steady state to the capital-labor ratio, output per worker, and consumption per worker when each of the following events occur? You should assume that the steady-state capital- labor ratio is below the Golden Rule level. k y C a) Productivity falls b) Population growth falls c) The saving rate falls d) The depreciation rate fallsWhat happens in the steady state to the capital-labor ratio, output per worker, and consumption per worker when each of the following events occur? You should assume that the steady-state capital-labor ratio is below the Golden Rule level.
- In Wonderland production per worker (y) depends on capital per worker (3) such the y=10√k. Every year 15% of the capital stock depreciates, while workers in Wonderland save 10% of their income. Every year the population grows at as e of 3% a) How might Wonderland and Neverland achieve economic growth in the long run?Is the following statement true, false, or uncertain? A one-time increase in the amounts of capital and labor that leaves capital per person unchanged has no effects on the levels of output or output per person in the short run or in the steady state.Assume the production function takes the general form: Y=Z*F (K,L,A)where all marginal products are positive.Which 3 of the following statements are correct?a. If A is fixed, then population growth acts as a drag on growth of output per person.b. If A is fixed, then population growth acts as a drag on growth, and so Malthus was correct that populationgrowth will always reverse the impact of technological improvements.c. Both rises in z and rises in K/L (capital intensity) will boost output per worker.d. Growth in output per worker can occur due to rises in z (technology) or rises in K/L (capital intensity), orboth.
- What are output per worker, capital per worker, steady-state capital per effective worker and steady-state output per effective worker? What do they imply?Suppose that the production function of a company is given by q = qL^2 · qC and that the amount of labour qL and the amount of capital qC are functions of time t. At time t = 2, we know that qL = 9 andqC =8 and that the growth rateof qL is equal to 2 and the growth rate of qC is equal to 8. Find the growth rate of the production q at that moment.Assume that a country's production function is Y = K1/2L1/2 and there is no population growthor technological change.a. What is the per-worker production function y = f (k)?b. Assume that the country possesses 40,000 units of capital and 10,000 units of labor. What isY? What is labor productivity computed from the per-worker production function? Is thisvalue the same as labor productivity computed from the original production function?c. Assume that 10 percent of capital depreciates each year. What gross saving rate isnecessary to make the given capital–labor ratio the steady-state capital–labor ratio? (Hint:In a steady state with no population growth or technological change, the saving ratemultiplied by per-worker output must equal the depreciation rate multiplied by the capital–labor ratio.)d. If the saving rate equals the steady-state level, what is consumption per worker?
- Assume that a country's production function is Y = K1/2L1/2 and there is no population growthor technological change.a. What is the per-worker production function y = f (k)?b. Assume that the country possesses 40,000 units of capital and 10,000 units of labor. What isY? What is labor productivity computed from the per-worker production function? Is thisvalue the same as labor productivity computed from the original production function?c. Assume that 10 percent of capital depreciates each year. What gross saving rate isnecessary to make the given capital–labor ratio the steady-state capital–labor ratio? (Hint:In a steady state with no population growth or technological change, the saving ratemultiplied by per-worker output must equal the depreciation rate multiplied by the capital–labor ratio.)d. If the saving rate equals the steady-state level, what is consumption per worker? Only D, other option answeredPopulation Growth and Technological Progress – Work It Out PLEASE WRITE ANSWERS CLEARLY An economy has a Cobb-Douglas production function: Y = K“(LE)'-a The economy has a capital share of 0.30, a saving rate of 42 percent, a depreciation rate of 4.00 percent, a rate of population growth of 5.25 percent, and a rate of labor-augmenting technological change of 3.5 percent. It is in steady state. b. Solve for capital per effective worker (k*), output per effective worker (y*), and the marginal product of capital. k* = y* = marginal product of capital =An economy's production function as follows Y = 8 (K)¹/2 (EL)¹/2 If depreciation rate is 10%, population growth rate is 4%, tech progress grows 6%, and saving rate is 20%. a. b. C. d. e. f. Write production function in term of per effective worker variables. Find steady state capital per effective worker, output per effective worker, consumption per effective worker, investment per effective worker. Find growth rate of capital per worker and output per worker at steady state. Find growth rate of capital stock and total output at steady state. Propose policies to encourage long run growth of total output and living standard? Draw relevant graph for the above questions.