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Suppose we're modeling an economy using the Solow model. It begins in steady state. By what proportion does y? (the post-change steady-state per capita GDP) change in response to the following changes? Show your work/reasoning (a solution for y? will be a useful starting point).
(a) The investment rate doubles?
(b) The depreciation rate falls by 15%
(c) Productivity rises by 15%
What is Gross National Product? Gross National Product (GNP): It measures the value of output produced through a country is citizens anywhere within the world, in a speci
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Use the model in the tax incidence application to determine the effect of a given change in the tax on widget, change in T, on the equilibrium quantity of widgets. How does your an
The rate of interest in the UK also showed very interesting results, to an impulse shock on oil price. The middle left graph from Fig 4.4 shows the results. Initially, in the short
A passive deficit is the portion of the deficit that exists when: A. inflation is not fully anticipated. B. inflation is fully anticipated. C. the economy is at potential income. D
Explain how inflation unemployment trade-off is not feasible under adaptive expectation.MEC002
Four aspects are interesting when we look at inflation data for Sweden During 1800s, when Sweden was primarily an agricultural society, deflation where almost as common as
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Why do we still have problem of "unemployment" ? How could we solve the problem? Which one is better fixed or flexible exchange rate of unemployment ?
Company A owns a patent with 15 years of remaining life. Company B is paying royalties to Company A for a license to the patent. It is estimated that royalty payments (end-of- year
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