Question
Please let me know if the following statements are True or False When the saving rate is relatively high, this implies that the steady state
Please let me know if the following statements are True or False
When the saving rate is relatively high, this implies that the steady state level of capital per worker is relatively high and output per worker is relatively low.
The Solow Growth Model predicts that countries with higher population growth rates will have lower steady state growth rates of output per worker
According to the Mundell Flemming model for a small open economy with flexible exchange rates, if the central bank cannot alter domestic interest rates, changes in the money supply could still influence aggregate income though changes in the exchange rate
Suppose you are given the aggregate production function for an economy and the amount of available capital increases for this economy. Holding labour constant, this increase in capital will cause the MPK to increase
Under the Solow growth model, a higher saving rate produces a temporary increase in the growth rate but not a permanent increase
Suppose that a small open economy initially is in a situation with balanced trade at the prevailing interest rate. If the world real interest rate increases above this initial level then this small open economy will have a positive net capital inflow
Suppose you are a macroeconomist interested in building a short run model of the aggregate economy, Most likely, your model will assume that prices are sticky in the short run.
Given the production function for the aggregate economy Y=F(K,L)=AK0.6L0.4 Where Y is aggregate output, A is a measure of available technology K is capital and L is labour
Given the above aggregate production function and holding everything else constant when L increases, output per unit of labour Y/L will decrease.
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