Start Discovering Solved Questions and Your Course Assignments
TextBooks Included
Active Tutors
Asked Questions
Answered Questions
Suppose that in country A, z = 1. Calculate per capita income and capital per worker. Calculate per capita income and capital per worker.
Also show that an increase in the savings rate increases the growth rate in per capita income.
What are the effects on the growth rates of aggregate output, aggregate consumption, and aggregate investment?
determine using diagrams how this affects the golden rule quantity of capital per worker and the golden rule savings rate. Explain your results.
Determine the long-run effects of this on the quantity of capital per worker and on output per worker.
In the Solow growth model, suppose that the marginal product of capital increases. Show the effects of this on the aggregate production function.
determine the effect of this on the quantity of capital per worker and on output per worker in steady state. Explain the economic intuition behind your results.
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.
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?
Reinterpret the endogenous growth model in this chapter as follows. Determine how this model can explain this observation, and discuss.