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Suppose two countries, A and B, with the same production function Y = K? L 1?? . The value of ? is 0.30, the growth rate of population is 2% and the depreciation rate is 5%.
a) Show that with price-taking firms the share of labor must be 1?? .
b) Compute the stock of capital, output and consumption per unit of labor in the steady state if the savings rates were 25% for country A and 35% for country B.
c) Compare both economies to the Golden Rule.
Identify one product in your home that is made elsewhere. Why was this product imported? (Hint: think comparative advantage and mutual gains from trade) Some oppose free trade. What are their reasons and how does this apply to the product you identif..
what is the wage, quantity hired, wage plus employer taxes and wage minus employee taxes if employees pay a $6 tax?
Do you think that monetary policy is easier to make than fiscal policy? Why is one easier or harder than the other? What is the Goal of each of the policies? Are the goals in conflict or complements of each other?
Some oligopolies use a form of implicit cooperation called price leadership, which is legal in the US. Why do you think these firms try to engage in this practice? And why does price leadership often fail?
Describe how the Federal Reserve is able to control the federal funds rate fairly closely and why this enables the Federal Reserve to have such good control over ALL short-term money market interest rates. Refer to changes in the Federal Reserve's ba..
The 2001 recession ended in November 2001, but the perception of "bad economic times" lingered into 2002 and 2003. What evidence do these graphs provide concerning the lingering perception of a recession.
What is the Law of Supply? How do we illustrate the Law of Supply? Give an example of the Law of Supply use two to four sentences to explain your example.
Which of the following is true about income levels in Western Europe and Latin America before 1700? Average income in Western Europe was higher than that in Latin America.
Using the four scenarios, discuss each and choose periods when each scenario has occurred in the U. S. or other countries: a. higher interest rates, more capital invested b. lower interest rates, less capital invested c. lower interest rates, more ca..
Using the CSU Online Library and the unit reading assignment, explore the capital budgeting techniques covered in the unit, NP, PI, IRR, and Payback. Compare and contrast each of the techniques with an emphasis on comparative strengths and weaknesses..
AMS recently instituted an in-house reprocessing program. The profits of this program include not only the benefits to the environment of recycling but also the goodwill generated by AMS's leadership in this area.
Find the average daily balance for the following credit card account. Assume one month between billing dates using the proper number of days in the month. Then find the finance charge is interest is 1.5% per month on the average daily balance. Finall..
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