Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please show steps for each question In the U.S. economy in 1991, real GDP was 4,861.4 (in billions of 1987 dollars), the capital stock was

Please show steps for each question

image text in transcribed
In the U.S. economy in 1991, real GDP was 4,861.4 (in billions of 1987 dollars), the capital stock was 13,806.2 (in billions of 1987 dollars), and employment was 118.4 (in millions of workers). In 1992 the numbers were: real GDP 4,986.3, capital stock 14,040.8, employment 119.2. Suppose the production function in both years is Y = AK%-2510.75 Use the space provided below to answer all the 5 questions below. Show your work. 1. Calculate total factor productivity for 1991 and 1992. (2 points) | 2. How much did total factor productivity grow from 1991 to 19927 (hint: answer should be a percent change) (2 points) ' | : 3. Calculate the percent increase in real output between 1991 and 1992. (2 points) : 4. Suppose tax incentives had raised the capital'stock in 1992, making it 10% higher, to 15,444.9. If employment didn't change, what would have been the percent increase in real output between 1991 and 19922 (3 points) 5. Instead of the increase in the capital stock in part d, suppose employment was 10% higher in 1992 making it 131.1. With the capital stock fixed at 14,040.8, what would have been the percent increase in real output between 1991 and 19927 (3 points)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Managerial Accounting

Authors: Karen W. Braun, Wendy M. Tietz

5th edition

134128524, 978-0134128528

Students also viewed these Economics questions

Question

Explain how to dispute irrational beliefs. Critical T hinking

Answered: 1 week ago