Compare both economies to the golden rule

Assignment Help Business Economics
Reference no: EM13839085

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.

Reference no: EM13839085

Questions Cloud

Why is scarcity a cultural concept : Write an essay on "Why is scarcity a cultural concept?"
Marginal-cost curve lies below the marginal-revenue curve : When the marginal-cost curve lies below the marginal-revenue curve. Assume that for a perfectly competitive firm marginal revenue equals rising marginal cost at 100 units of output. At this output level, the firm's total fixed cost is $600 and its to..
Purpose of the statement of cash flows : Describe the purpose of the statement of cash flows. Examine the usefulness and limitations of financial statement analysis
Economic profit is difference between firms total revenue : Economic profit is the difference between a firm's total revenue and its. What is the difference in profit maximization between the perfect competitor and all other types of firms?
Compare both economies to the golden rule : 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%. Compare both economies to the Golden Rule.
How can your firm arrange the business to be most profitable : Explore the expected GDP growth of each country and the forecast exchange rates to the U.S. dollar. Based on the forecast exchange rate with the U.S. dollar in 1 and 2 years, should the $300 million investments be paid for immediately, hedged, or pai..
Why are they rated so highly : Why are they rated so highly? how/ why are they unique? Where are they located?What do they provide? why are they impressive to me? Which one, I will want to work for
Events affect output-capital-consumption per unit of labor : Explain how the following events affect output, capital and consumption per unit of labor in the long run and along the transition according to Solow's Model:
What suggestions would you make for improving administration : What suggestions would you make for improving the administration procedure used? What, if any changes, would you make to the questionnaire before administering it to a larger group of respondents?

Reviews

Write a Review

Business Economics Questions & Answers

  Think comparative advantage and mutual gains from trade

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

what is the wage, quantity hired, wage plus employer taxes and wage minus employee taxes if employees pay a $6 tax?

  Monetary policy is easier to make than fiscal policy

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?

  Use a form of implicit cooperation called price leadership

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?

  Control the federal funds rate fairly

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..

  Bad economic times

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.

  How do we illustrate the law of supply

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.

  About income levels in western europe and latin america

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.

  Higher interest rates more capital invested

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..

  Show you understand how each is applied and used

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..

  Maximizing the profit of recycling

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 average daily balance for the credit card account

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..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd