Consider the standard RBC model presented in class Assume the economy is in a steady state such that Ki K1 1 for all t and consumption is a constant share of income such that C bY How would an increase in depreciation impact the steady state consumption level Assume A N 1 and T 0 20 1 (1 6) 1 0 (1 6) as 1 a 82 A ac B ac as here 1955 (155 9P na D ac ba 1 a (1 b) (1 6) Consider the standard RBC model presented in class If the MPC decreased in period t, what would we expect to happen to output in period t 1 A Output would decrease in t 1 B Output would increase in t 1 C There would be no change in output in t 1 D The result would depend on the depreciation level Consider the standard RBC model presented in class Assume the economy is in a steady state such that Ki K1 1 for all t and consumption is a constant share of income such that C bY How would an increase in depreciation impact the steady state consumption level Assume A N 1 and T 0 20 1 (1 6) 1 0 (1 6) as 1 a 82 A ac B ac as here 1955 (155 9P na D ac ba 1 a (1 b) (1 6) Consider the standard RBC model presented in class If the MPC decreased in period t, what would we expect to happen to output in period t 1 A Output would decrease in t 1 B Output would increase in t 1 C There would be no change in output in t 1 D The result would depend on the depreciation level

Question

Consider the standard RBC model presented in class  Assume the economy is in a steady state such that Ki   K1 1 for all t and consumption is a constant share of income such that C   bY  How would an increase in depreciation impact the steady state consumption level  Assume A N 1 and T 0  20 1 (1 6) 1 0 (1 6) as 1 a 82 A  ac B  ac as here  1955   (155  9P  na D             ac ba 1 a (1 b) (1 6) Consider the standard RBC model presented in class  If the MPC decreased in period t, what would we expect to happen to output in period t  1  A  Output would decrease in t 1 B  Output would increase in t 1 C  There would be no change in output in t   1 D  The result would depend on the depreciation level  Consider the standard RBC model presented in class  Assume the economy is in a steady state such that Ki   K1 1 for all t and consumption is a constant share of income such that C   bY  How would an increase in depreciation impact the steady state consumption level  Assume A N 1 and T 0  20 1 (1 6) 1 0 (1 6) as 1 a 82 A  ac B  ac as here  1955   (155  9P  na D             ac ba 1 a (1 b) (1 6) Consider the standard RBC model presented in class  If the MPC decreased in period t, what would we expect to happen to output in period t  1  A  Output would decrease in t 1 B  Output would increase in t 1 C  There would be no change in output in t   1 D  The result would depend on the depreciation level

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Consider the standard RBC model presented in class. Assume the economy is in a steady state such that Ki = K1+1 for all t and

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