20072prbset9 - METU Department of Economics Econ 202...

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METU Department of Economics Econ 202 Macroeconomic Theory Instructor: Ebru Voyvoda and Şirin Saraçoğlu Teaching Assistant: Gizem Koşar 2007-2008 Spring Semester Problem Set 9 Part A. True/False/Uncertain and Discussion Questions. In each question justify your answer with a short argument. 1. A higher saving rate alone can sustain higher growth of output forever. 2. The golden rule level of capital tells us that the highest level of consumption in steady-state is achieved when the saving rate is equal to 0. 3. Even in the absence of technological progress, growth could go on forever if capital never depreciated. 4. The Turkish capital stock is far below the golden rule level; therefore, individuals should increase their saving. 5. An economy is in steady state with no technical (productivity) change. Because of an increase in acid rain, the rate of capital depreciation permanently rises. What are the effects on steady state (ss) capital per worker, the ss output per worker, ss consumption per worker and the long run growth rate of the capital stock?
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This note was uploaded on 05/26/2010 for the course ECON 202 taught by Professor Tunc during the Spring '10 term at Middle East Technical University.

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20072prbset9 - METU Department of Economics Econ 202...

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