### Solow model economy that begin with a capital stock equals

##### Reference no: EM13800477

Consider the Solow model economy that begin with a capital stock equals to 300 billion and suppose its steady state level of capital is 500 billion. To its pleasant surprise, the economy receives a generous gift of foreign aid in the form of 100 billion worth of capital.

(a) Use Solow model to show what happen to economy immediately and over the long term. using the model equation determine by what preparation consumption initially rises and what happens to consumption in long run.

(b) Suppose instead of starting below its steady state, the economy begins in the steady state, with capital stock equals to 500 billion. Repeat the analysis for part (A) for this analysis.

#### What if the probability of dying

If over speeding by 10 mph results in the probability of dying in one hour to be 1 in 400,000, use the Jones-Lee approach to estimate Junior’s value for his life if he makes

#### Antitrust enforcement actions

Which of the following antitrust enforcement actions would have the greatest likelihood of being undertaken and led by the U.S. Department of Justice Antitrust Division rather

You are considering selling your house. Your reservation value is \$100,000. Your real-estate agent tells you that there is a 0.4 chance a random buyer will pay \$150,000, a 0.2

#### Specialization and Exchange

Please select one item that you can see from where you are sitting right now – and list and describe as many people as you can think of that played a role in getting that item

#### Expectation of a substantial decrease in interest rates

Suppose there is a sudden expectation of a substantial decrease in interest rates. What will this do to the demand for long term securities? What will this do to the demand of

#### Considering upgrading an old icecream maker

A dairy company is considering upgrading an old ice- cream maker. Upgrading is available at two levels: moderate and extensive. Moderate upgrading costs \$6, 500 now and yields

#### Factor of production in perfectly competitive market

In a perfectly competitive factor market, a firm finds that the marginal factor cost of a factor of production is: The price paid by a firm for a factor of production in a per

#### Should the airline remain in business

Airway Express has an evening flight from Los Angeles to New York with an average of 80 passengers and a return flight the next afternoon with an average of 50 passengers. The