Reference no: EM13178549
1. Consider 2 countries, Avataria and Twilightia, which can be described by the Solow model. Avataria has a capital-labor ratio that is initially twice as big as that of Twilightia, but neither country is yet in a steady state. Both countries have the same production function,
Y(K,L) = 4(K)^1/2(L)^1/2.
Avataria has a 10% investment rate and 8% depreciation rate, while Twilightia has a 15%
investment rate and 12% depreciation rate.
(a) Calculate the steady-state capital-labor ratio for each country. Does the initial capital-labor ratio affect your results?
(b) Calculate output per worker and consumption per worker for each country. Which country has the highest output per worker? The highest consumption per worker?
(c) In general, do all the fundamental characteristics of different countries need to be identical for convergence of output per worker?
2. How long will it take for Avataria with a growth rate of 6% to triple its income? What about Twilightia with a growth rate of 18%? Will it be correct to say that Twilightia will triple its income 3 times faster than Avataria? If no, then what is the correct answer?
|
Puerto ricans slighted
: What do you think, are Puerto Ricans "slighted"? They get SOME of the benefits (and much of the responsibility!) but aren't allowed the right to vote in the final presidential election...
|
|
Constantly fires thrusters on her space suit
: When an astronaut goes on a space walk outside the Space Station, she will quickly float away from the station unless she has a tether holding her to the station or constantly fires thrusters on her space suit?
|
|
What is the value of net exports
: Assume that gross private domestic investment is $800 billion and the government (state, local, and federal combined) is currently running a $400 billion deficit. If households and businesses are saving $1,000 billion, what is the value of net exp..
|
|
Jean piaget categorize the moral reasoning-respectively
: Jerome and Hani got up early on Saturday morning and decided to make breakfast in bed for their mother. While reaching for the bed tray in the back of the hall cabinet, they accidentally bumped and broke one of their mothers favorite porcelain dolls.
|
|
Determine consumption per worker
: Calculate output per worker and consumption per worker for each country. Which country has the highest output per worker? The highest consumption per worker?
|
|
What is the implication for the expected value
: What is the implication for the expected value and standard deviation of the returns on your portfolio if you invest in N (instead of only 3) of these assets and N becomes very large?
|
|
What is the pattern of comparative advantage
: What is the opportunity cost of producing rice in US??Confirm the existence of comparative advantage by computing opportunity costs and filling in the table below. What is the pattern of comparative advantage?
|
|
Termination and enforcement of contracts
: In 1994, the Dryden Construction Company contracted with the Ontario Hydro Electric Power Commission to build an access road 7 miles long from its Manitou Falls generating station to Provincial Highway No. 105. The contract contained the following cl..
|
|
Necessarily unique for the records in a database table
: The _______ is not necessarily unique for the records in a database table, but is nonetheless often used to locate a particular record:
|