Due Mar. 12 - Homework Set 3 Economic Development 333 Due:...

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Homework Set 3 Economic Development 333 Due: Weds Chapter 3 1. Give an interpretation of the following equation, which is derived from equation A3.3, p. 136. Δ y = AΔ k y 2. What does the term sf ( k ) of equation A3.5 (p. 137) mean and why is it plotted below the production function f ( k ) in Figure A3.1 (p. 137)? 3. What does the term ( δ + n ) k mean and why is it plotted as a straight line in Figure A3.1 4. The Solow Growth Model achieves steady-state when Δ k = 0 in equation A3.4, p. 137. Identify the steady-state in Figure A3.1, p. 137. 5. Why does growth in output, y tend to increase when sf ( k ) > ( δ + n ) k ? 6. Why does growth in output, y tend to decrease when sf ( k ) < ( δ + n ) k ? 7. Why is s’f ( k ) drawn higher than sf ( k ) in Figure A3.2, p. 138? 8. Why is the economy better - off at k *’ rather than k * in Figure A3.2, p. 138? 9. Why the growth rate in output, Δ y/y equal zero at k *’ and k * in Figure A3.2, p. 138? 10 Read the following
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This note was uploaded on 05/03/2008 for the course ANTH 316 taught by Professor Alexanian during the Spring '08 term at CSU Fullerton.

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Due Mar. 12 - Homework Set 3 Economic Development 333 Due:...

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