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Determine the effects of a decrease in the population growth rate on the golden rule quantity of capital per worker and on the golden rule savings rate.
Determine capital per worker, income per capita, and consumption per capita in each of the 10 years following the increase in the savings rate.
Determine consumption, investment, savings, and aggregate output in the initial steady state.
Construct time series plots of real GDP, the ratio of consumption to GDP, and the ratio of investment to GDP.
At what rate does this measure of output per worker grow, on average? What does this tell us about TFP growth?
How is the Solow model consistent with evidence on convergence across countries?
What are three sources of differences in productivity across countries? What causes economic growth in the endogenous growth model?
What two factors affect the growth rate of income and consumption in the endogenous growth model?
What effects does this have on the rates of growth and the levels of human capital, consumption, and output? Explain your results.
Determine the effects of this on the paths of aggregate consumption and aggregate output over time.
Calculate and plot the percentage change in federal government receipts and the percentage change in real GDP.
Plot the ratio of aggregate consumption to GDP. Comment on the features of your time series plot. What principle of consumption behavior helps?
Determine the present-value budget constraint of the government. Write down the lifetime budget constraint of a consumer.
How does the increase in the tax rate affect the optimal choice of consumption (in the current and future periods) and saving for the consumer?
Determine, using a diagram, how this shift in income will affect consumption this year and next year and saving this year. Explain your results.
State the Ricardian equivalence theorem. Give four reasons that the burden of the government debt is not shared equally in practice.
What are the effects of an increase in the real interest rate on consumption in each period, and on savings?
What are the effects of an increase in future income on consumption in each period, and on savings?
What are the horizontal and vertical intercepts of a consumer's lifetime budget constraint? What are the three properties of a consumer's preferences?
What is the price of future consumption in terms of current consumption? What is the slope of a consumer's lifetime budget constraint?
How do consumers save in the two-period model? What factors are important to a consumer in making his or her consumption-savings decision?
Calculate average income per worker for the low income, middle income, and high income countries, respectively, for 1960 and 2007.
Calculate the standard deviation of income per worker for the countries of the world for 1960 and 2007. Does this indicate that convergence is occurring or not?
Suppose that for periods 1, 2, 3, ..., 10, u = .7 and s = 0.05. Calculate aggregate consumption, output, and quantity of human capital in each of these periods.
What is the immigration policy that maximizes the welfare of the citizens of both countries?