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An economy has a Cobb–Douglas production function: Y = Kα(LE) 1−α. The economy has a capital share of a third, a saving rate of 24 percent, a depreciation rate of 3 percent, a rate of population growth of 2 percent, and a rate of labor-augmenting technological change of 1 percent. It is in steady state. a) At what rates do total output, output per worker, and output per effective worker grow? b) Solve for capital per effective worker, output per effective worker, and the marginal product of capital. c) Does the economy have more or less capital than at the Golden Rule steady state? How do you know? To achieve the Golden Rule steady state, does the saving rate need to increase or decrease? d) Suppose the change in the saving rate you described in part (c) occurs. During the transition to the Golden Rule steady state, will the growth rate of output per worker be higher or lower than the rate you derived in part (a)? After the economy reaches its new steady state, will the growth rate of output per worker be higher or lower than the rate you derived in part (a)? Explain your answers.
Pick any public company and discuss which 2 or 3 macroeconomic indicators which would most profoundly affect that business and why.
Suppose the inverse demand for coal is estimated to be P = 75 - 0.6Q, whereP is the price of coal and Q is the quantity demanded. The supply of coal is given by P = 0.3Q. Graph inverse demand and inverse supply. Calculate and show graphically the pri..
Illustrate what would the benefits of each action be (besides emissions reduction). Illustrate what would the costs of each action be.
In a crowded city far away, the civic authorities decided that rents were too high. The long-run supply function of two-room rental apartments was given by q = 17 + 4p and the long-run demand function was given by q = 304 – 5p, where p is the rental ..
If David's only illness this year results in an appendectomy, explain how many days will he choose to stay in the hospital
American rice producers have extremely high production costs, due to some structural problems. Therefore, if not supported by the government, they will not be able to compete with foreign producers. Analyze two supportive policies intended to maintai..
Suppose that the inverse demand for clothes hangers is given by: P = 3 − Q/16,000. Suppose further that the marginal cost of producing hangers is constant at $1. What is the equilibrium price and quantity of hangers if the market is competitive?
With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 6 units of labor, 8 units of land, 2 units of capital, and 1 unit of entrepre..
What is "segmentation by purpose of travel"? How can it help in the analysis of tourism? What is "psychographic" segmentation? How does it help in the analysis of tourism?
Technology, including travel-driven technology, has made the world smaller. It has enabled the rapid exchange of ideas and information, further shrinking the world. This has also led to more porous borders with significant difficulty in ensuring safe..
Louie produced 300 fire trucks. What action leads to both gains in revenue and loses in revenue for Louie.
When a government or corporation sells bonds to raise money, it can do so in one of two ways. It can target a certain amount to raise or it can target a certain amount to pay back at the end of the bond (this is simplified for the purpose of the prob..
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