ECO 301 Intermediate Macroeconomics, Spring 2010 Instructor: Yangyi Shan Reminder: The 2 nd midterm exam is on Thursday, March 25th in class time Homework Assignment 4 Due Day: Tuesday, March 23, 2010 at the beginning of lecture Instructions: • Please write your name, student ID and session number on the first page. • Please show your work. • Please put your answers in the order of the questions • Please staple your homework 1. (15 points) Over the past twenty years an economy’s total output has grown from 1000 to 1300, its capital stock has risen from 2500 to 3250, and its labor force has increased from 500 to 575. All measurements are in real terms. Calculate the contributions to economic growth of growth in capital, labor, and productivity, assuming that 3 .0 = K a and N a = 0.7 2. (40 points) An economy has the per-worker production function t y = 3 5 .0 t k where t y is output per worker and t k is the capital-labor ratio. The depreciation rate is 0.1, and the population growth rate is 0.05. Saving is
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population growth rate, per capita consumption, saving rate