Growth model with diminishing marginal product of capital

Assignment Help Business Economics

Reference no: EM131094521

a. Show why the Solow growth model with diminishing marginal product of capital (assume labor is constant) implies that capital accumulation alone cannot result in continuous growth.

b. What happens to steady state level of capital and output if there is a one time increase in total factor productivity? An increase in the savings rate?

Reference no: EM131094521

Questions Cloud

Explain what kind of forecasting tools : If you have been marketing Girls Scout Cookies for a local Girl Scout Troop for the last three years, explain what kind of forecasting tools you would use, and why, to determine your sales targets for this year.

What does it mean for individuals to have unlimited wants : Explain how unlimited desires and limited resources combine to create the need for economic analysis Assignment: What does it mean for individuals to have unlimited wants? Why can’t individuals have everything they want?

Consider market in which the supply and demand curves : A tax is applied to the market in the amount of $32 per unit. With the tax, sellers now receive a price of $60 per unit sold. You will have to calculate the price paid by buyers - but you have enough information to do so. With the tax, 540 units are ..

The estimated demand for good : The estimated demand for a good is Q=25-5P +0.32M+12P where Q is the quantity demanded of the good , Pr is the price of the good, M is income, and Pr is the price of related good R. If income decreases by $1000, all else constant, quantity demanded w..

Growth model with diminishing marginal product of capital : Show why the Solow growth model with diminishing marginal product of capital (assume labor is constant) implies that capital accumulation alone cannot result in continuous growth. What happens to steady state level of capital and output if there is a..

Relationship between the slope of a curve and its inelasticy : What can you conclude about relationship between the slope of a curve and its inelasticy? explain in nontechnical way why demand is elastic in the northwest segment of the demand curve and inelastic in the southeast segment

Present the logic of the corn theory of rent and profit : Present the logic of the corn theory of rent and profit from Ricardo. Then explain what happens to the rate of profit in agriculture as more land of inferior quality is brought into cultivation. Show how the developments in agriculture affect the ove..

Affect balance of trade : Turkey's price for the Big Mac Index is 3.41$ and the US price of a Big Mac is 4.93$ based on this criteria is it over or undervalued? If Turkey's y moves in the direction of indicated by the “Big Mac Index’, how do you think this will affect your Tu..

Dynamics of aggregate demand and aggregate supply model : Discuss and explain the following questions using knowledge about the dynamics of Aggregate Demand and Aggregate Supply Model. What is the cause of the 2007-09 Great recession? What happened to aggregate demand and aggregate supply model during this ..

User Account

All Pages