Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

problem: A country has the per-worker production function yt = 6 kt0.5, where yt is output per worker and kt is the capital-labor ratio. The depreciation rate is 0.1 and the population growth rate is 0.1. The saving function is:

St = 0.1 Yt,

Where St is total national saving and Yt is total output.

a) Determine the steady-state value of capital-labor ratio?

b) Determine the steady-state value of output per worker?

c) Determine the steady-state value of consumption per worker?

problem: According to the Solow model, how would each of the given affect consumption per worker in the long run (that is, in the steady state)? Draw a figure and elucidate.

a) The destruction of a part of the nation’s capital stock in a war.

b) A permanent raise in the rate of immigration (that raises the overall population growth rate).

problem: Money demand in an economy in which no interest is paid on money is:

Md/P = 500 + 0.2Y - 1000i

a) Assume that P = 100, Y = 1000, and i = 0.10. Find out real money demand, nominal money demand and velocity.

b) Supposing that the money demand function as written holds, show how velocity is influenced by a raise in real income, by an increase in the nominal interest rate, and by an increase in the price level.

problem: The income elasticity of money demand is 2/3. Real income is expected to grow by 4.5% over the next year, and the real interest rate is expected to remain constant over the next year. The rate of inflation has been zero for several years.

When the central bank wants zero inflation over the next year, what growth rate of the nominal money supply would it prefer?

problem: Suppose that prices and wages adjust rapidly and hence the markets for labor, goods, and assets are always in equilibrium. What are the effects of each of the given on real money demand and the current price level? Describe in words.

a) The temporary increase in government purchases.

b) The reduction in expected inflation.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M9241

Have any Question? 


Related Questions in Microeconomics

Question it costs a company 35000 to produce 700 graphing

Question: It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators. ...

Global poverty is an international issue other countries

Global poverty is an international issue. Other countries are inclined to look to the U.S. with its great wealth to take an active role in assisting poor nations. People here spend money trying to counter baldness while ...

Question - although the federal reserve has purchased over

Question - Although the Federal Reserve has purchased over $2 Trillion in bonds during quantitative easing, how much has the money supply increase since August 2008? At the time was future inflation still a concern?

Question from 2000 to 2002 the sharp decline in capital

Question: From 2000 to 2002, the sharp decline in capital spending was almost completely matched by the sharp decline in government saving. (A) How do you think the overall economy would have responded? However, suppose ...

Question the current price of a stock is 50 suppose the

Question: The current price of a stock is $50. Suppose the following distribution describes the possible prices that the stock will be in 1 year: the probability the stock price will be 45 is 0, the probability the stock ...

Question if a canadian tourist drinks german beer in a

Question: If a Canadian tourist drinks German beer in a Cleveland restaurant, how will the U.S. Gross National Product (GNP) be affected if the Cleveland restaurant is owned by a Swiss corporation? How will the U.S. Gros ...

Question in 1980 the inflation rate in italy was 21 and the

Question: In 1980, the inflation rate in Italy was 21% and the unemployment rate was 4.4%. By 1998, the inflation rate in Italy had declined to 2% and the unemployment rate had risen to 12.3%. (A) What were the principal ...

Question consider the case of global environmental problems

Question: Consider the case of global environmental problems that spill across international borders as a prisoner's dilemma of the sort studied in Monopolistic Competition and Oligopoly. Say that there are two countries ...

Question during 1983 1984 and 1985 the dollar was

Question: During 1983, 1984, and 1985, the dollar was overvalued and kept rising. During that period, real imports rose $160 billion and real exports rose only $27 billion, while real GDP rose an average of 5.1% per year ...

Question consider two ways of protecting elephants from

Question: Consider two ways of protecting elephants from poachers in African countries. In one approach, the government sets up enormous national parks that have sufficient habitat for elephants to thrive and forbids all ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As