ECON 3311 Homework Chapter 9 Assignment 2015

QUESTION

Homework Chapter 9ECON 3311Note the following:i. Please type assignment.ii. Use complete sentences where appropriate.iii. Top right corner of all assignments should have:Student NameAssignment TitleAssignment Due DateQuestions:1. Technological growth, g, in the Solow Model is called “labor-augmenting”? What doesthis mean? (short answer)2. Given a production function: Y = F (K, L) = K0.4L0.6 = K4/10 L6/10. Let savings rate = 5%,depreciation rate = 2.5%, population growth rate = 1.5%, and technological growth rate= 2.0%, and. (Assume no government. Remember that with tech. growth use effectivelabor.)a. What is the production function f (k), in per capita? (show your work)b. What is Marginal Product of Capital per capita, MPk? (show your work)c. What is the steady-state value of k (called k*), capital per capita? (show yourwork)d. What is steady-state value of y (called y*), output per capita? (show your work)e. What is steady-state value of i (called i*), investment per capita? (show yourwork)f. What is the golden rule value of kg, capital per capita? (show your work)g. Why is kg* and k*different? Which one is greater? To reach golden rule capitalper capita, kg*, should savings rate be increased or decreased? (short answer)

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