ECON202assignment6

ECON202assignment6 - ECON 202, SPRING 2009 Assignment # 6...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ECON 202, SPRING 2009 Malhar Nabar Assignment # 6 Posted: May 5 Due: In my mailbox 11 am, May 12 Note: covering material from the start of the semester to the most recent topics covered in class. 1. Solow Model: Theory An economy is described by the following aggregate production function Y = K 0 : 5 ( el ) 0 : 5 The depreciation rate on capital is 0.03. The growth rate of the labor force n is 0.01. The growth rate of technology g is 0.01. The saving rate is 10 per cent of GDP. a. Please write down the "intensive form" of the production (i.e. the production function in per e/ective worker terms). b. Provide the equation that describes the accumulation of capital per e/ective worker in this economy. c. Calculate the steady state levels of capital per e/ective worker and output per e/ective worker. d. Calculate the steady state aggregate capital to aggregate output ( K=Y ) ratio. e. Suppose that the saving rate is raised to 15% of GDP. Calculate the new ( K=Y ) ratio. 2. Policy analysis using the Solow Model You are the newly appointed Chief Economic Adviser to the President. The President is con-
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 3

ECON202assignment6 - ECON 202, SPRING 2009 Assignment # 6...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online