Compare both economies to the golden rule

Assignment Help Business Economics

Reference no: EM13740801

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: EM13740801

Questions Cloud

Market changes affect the demand for resources : How markets allocate resources. Derived demand is the change in demand due to a result initiated in another market. Market changes affect the demand for resources in related markets. For the following scenario, you are given a list of products.

Develop a presentation to the warehouse manager : Develop a presentation to the warehouse manager that will be used to PROMOTE the benefits of quality management for his department.

Key aspects to developing successful process : 1. Why is process management necessary for an organization? 2. Discuss some of the key aspects to developing successful process and systems development projects.

Report income when debt is forgiven : Consider the following statement: "A taxpayer should not have to report income when debt is forgiven because the taxpayer receives nothing." Do you agree or disagree? Explain

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.

Tuberculosis in the work environment : Imagine there has been a tuberculosis (TB) outbreak in your office building. Design a plan to address the prevention of TB in your particular work environment. Be specific.

Consider solows model when the production function : Consider Solow's model when the production function is Y = 1000K0.3L0.7 . The population growth rate is 2%, ? = 0.1 is the depreciation rate and s = 0.25 is the savings rate.

Direction of a person behavior in an organization : Motivation may be defined as psychological forces that determine the direction of a person's behavior in an organization.

Describe the trend of interest rates : Plot the current yield curve from the interest rates of U.S. Treasury securities as found in WSJ or IBD, or examine the chart WSJ or IBD provides. Describe the trend of interest rates over the last several years

User Account

All Pages