User Account

All Pages

Derive the golden rule savings rate for economy

Assignment Help Macroeconomics
Reference no: EM13132329

1. Assume an economy has a production function of:

Y = AK.35L.65 with: A = 100, K = 1,000 and L = 400. There is no labor force growth and technology remains constant.

(a) Assume that the capital stock in this economy depreciates at 10%/year and the savings rate out of GDP is 40%. What would be the steady state level of y, c, s, k?

(b) Derive the golden rule savings rate for this economy. (Hint it will be 35 percent) What would be the new level of steady state y, c, s, k if the economy moved to the golden rule savings rate?

Reference no: EM13132329

Questions Cloud

Increase in the number of lawsuits : Discuss three major factors that have contributed to the recent increase in the number of lawsuits aganist auditors and the size of awards to plaintiffs.
Projected total profit : Beaver's makes 3 products. Each requires work in a three different departments. What is the projected total profit and how much of each product should be produced?
Compounds that contain nitrogen in a three-membered ring : Explain the following observations. 1. Aziridines, compounds that contain nitrogen in a three-membered ring, undergo pyramidal inversion much more slowly than do other alkylamines
Define the metabolism of amino acids : Vitamin b6 is needed in the metabolism of amino acids. When it binds to an enzyme it forms a complex with the e-amino group of lysine, which is a primary amine.
Derive the golden rule savings rate for economy : Derive the golden rule savings rate for this economy.  (Hint it will be 35 percent)  What would be the new level of steady state y, c, s, k if the economy moved to the golden rule savings rate?
Cost-volume-profit problem : Canyon Escape sells individual tickets for $75 for walking tours of the Grand Canyon. Unit-level cost, including lunch, are $15 per ticket; fixed cost total $200,000 per year
How many liters of oxygen gas must be added : At 4.00 L, an expandable vessel contains 0.864 mol of oxygen gas. How many liters of oxygen gas must be added at constant temperature and pressure
Function and linear models : In 2006, Jenny began selling magazines. The company sold Jenny a beginning packet for $250.00. Jenny's cost for each magazine is 10% of the sales price.
Draw a doagram to show the changes in potential energy : Draw a doagram to show the changes in potential energy that occur from the rotation around the C1-C2 bond of 1-bromopropane

Reviews

Write a Review

Macroeconomics Questions & Answers

  Spell out the types of policies also practices companies

Spell out the types of policies also practices companies should develop if they want to keep their workers from unionizing.

  Suppose the following output and labor hours

Suppose the following output and labor hours for Russia and Germany in producing Wheat and Cloths.

  Explain how much should it be willing to pay today

Explain how much should it be willing to pay today for the office complex.

  Find the equilibrium rate of return

Assume the market can be described through the following three sources of systematic risk with associated risk premiums.

  Explain why is strong home currency mitigate

Explain why is strong home currency mitigate the growth of inflation rate locally

  Determine the effect of subsidy on market equilibrium

Assume bread is subsidized in a small Caribbean nation with a high percentage of citizens who live in poverty. The subsidy is paid to suppliers of bread through government in amount of 50 pesos per loaf.

  Whenever a beer company rise its advertising budget

Whenever a beer company rise its advertising budget 18 percent, the demand for its beer increased 28 percent. What is the advertising elasticity for the company's product.

  As customers will more price sensitive also price conscious

Do you think we, as customers will be more price sensitive also price conscious. What do you think this means for luxury goods.

  Oligopoly market structure

In Gelate, Pennsylvania, the market for compact discs has evolved as follows. There are two firms that each use a marquee to post the price they charge for compact discs.

  Illustrate what is the size of the labor force

Illustrate what is the size of the labor force. What is the official unemployment rate.

  Utility function and total wealth

What is the amount of the difference between the maximum premium and AFP, and what is this called?

  Question about economic growth

Discuss some polices the United States government could take to increase United States economic growth? Name two or three and describe why these would encourage growth.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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