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1. In 2020, the pandemics of Coronavirus has caused an unprecedented global economic crisis.- For example, in the United States, the Covid-l9 has damaged total

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1. In 2020, the pandemics of Coronavirus has caused an unprecedented global economic crisis.- For example, in the United States, the Covid-l9 has damaged total national output ofthls country via several channels, including a supply shock, a demand shock and a historical financial shock. The inuence of this heath crisis varied by industries and across subsectors within an industry. Suppose, we can use a Cobb-Douglas production function to estimate national output (Y) of the US economy as Y; = AK \"1}", where rindicates the year. Here K indicates total capital input and L is total labor, and we have a = 31% or 0.3. Also, we know the coefcient of A is the total factor of productivity (TFP). As a benchmark, the value of A = 2 in 2019. Thus, the production function of GDP in 2019 can be expressed as 1'2919 = 2K \"L14. Please use the followrng information to estimate national output (GDP) growth rates in 2020 and 2021. Note: You can use 2019's GDP as a benchmark and estimate growth rate of 2020 based on the level of 2019. Here we assume a has the same value (a = 0.3). (1) During the pandemies, the high personal saving rate delayed capital accumulation, though scal stimulus package repaired some disrupted credit intermediation. However, total capital stock (K) grew slowly 5% in 2020. In the labor market, the damage caused by (David-19 has been the most severe one in recent history. Economic shutdown and laid-off substantially lowered labor supply and participation. Compared with 2019, total labor stock (L) fell 19% in 2020 (or it was 81% of 2019). The only noticeable progress was a fast increase of total factor productivity (factcrA), thanks for applications of digital technology. Its value jumped up from 2 of 2019 to a higher value of 2.2 in 2020. According to the information given, how much is the yearly GDP gowr rate in 2020 compared with 2019. (2) Now suppose in 2021, total labor stock (L) recovered to 95% of the 2019 level. And capital stock (K), after several rounds of economic stimulus packages, reached at 108% of the 2019 level. Given the same total factor productivity as 2019 (factorA = 2), how much GDP in 2021 is to the level (96) of 2019? How much is the yearly GDP growth rate from 2020 to 2021

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