Question
Consider the Cobb Douglas production function: Y=K1/2L1/2; C=10+0.6(Y-T); G=40; T=50; I=I(r)=30-ra)Compute the value of Y for K=100 and L=100b)Define the terms constant returns to scalec)Compute
Consider the Cobb Douglas production function: Y=K1/2L1/2; C=10+0.6(Y-T); G=40; T=50; I=I(r)=30-ra)Compute the value of Y for K=100 and L=100b)Define the terms constant returns to scalec)Compute MPL and MPKd)The total factor payments (illustrateEulers theorem)e)Find the equilibrium real interest rate.f)If government reduces taxes to 40(T1=40), find the new equilibriuminterest rateg)Illustrategraphicallythe initial and new equilibrium.Does the crowding out happen due to fiscal policy? If yes, find the value.
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Internal Auditing As A Career
Authors: Richa Yamini Goel
1st Edition
B09RMBWZ2L, 979-8412866512
