Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

only need question 3 to be answered pls help. the unemployment rate and how does it compare to the initial one? Using diagrams explain how

only need question 3 to be answered pls help.

image text in transcribed
the unemployment rate and how does it compare to the initial one? Using diagrams explain how labour market tightness, j, and labour force, Q are affected in the high wage equilibrium. Problem 2 (Exogenous Growth Models) [ 35 marks ] Consider the following numerical example using the Solow growth model. Suppose that F(K, N) = ZK3N3 and d = 0.10, so = 0.2, n = 0.02, N = 100 and z = 1. Suppose K = 400 in period 0 and the unit period is one year. Suppose that the economy is initially in the steady state (at t=0) and in year one (t=1) saving rate increato 0.4 and stay there forever. [hint: k' = Szf (k) + (1 - d) k 1 +n And Aggregate quantities are given by, eg. X = x * N where r = ~, where x is per-worker quantity] 1. Find * the steady state per-capita capital stock, consumption per capita (c*) and output per capita (y*) for time t = 0. 2. Determine the golden rule saving rate, s, capital per worker, k*, kgr, output per capita, yar, and consumption, ca for time t=0 3. Determine the aggregate quantities K, C and Y of the capital stock, consumption and output for years 1, 2 ,3, 4 and 5. Summarize your results using a table

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Political Economy

Authors: Thomas Oatley

6th Edition

1138490741, 9781138490741

More Books

Students also viewed these Economics questions

Question

Read and interpret an income statement.

Answered: 1 week ago

Question

=+ What are the undesirable consequences?

Answered: 1 week ago