Answer to exercises - Chapter 11 6 a K N = s(2 δ 2 Y N =s(4 δ b C N =(1 s Y N = s(1 s(4 δ c-e Y N increases with s C N increases until s =0.5

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Unformatted text preview: Chapter 11 6. a. K / N =( s /(2 δ )) 2 ; Y / N =s/(4 δ ) b. C / N =(1- s ) Y / N = s (1- s )/(4 δ ) c-e. Y / N increases with s . C / N increases until s =0.5, then decreases. 7. a. Yes. b. Yes. c. Yes. d. Y / N = ( K / N ) 1/3 e. In steady state, sY //N = δ K / N , which, given the production function in part (d), implies K / N =( s / δ ) 3/2 f. Y / N =( s / δ ) 1/2 g. Y / N = 2 h. Y / N = 2 1/2 8. a. Substituting from problem 7 part (e) implies K / N =1. b. Substituting from problem 7 part (f), Y / N =1. c. K / N =0.35; Y / N =0.71 d. K / N Y / N t 1.00 1.00 t +1 0.90 0.97 t +2 0.80 0.93 t +3 0.71 0.89 Chapter 12 2. a. Most technological progress seems to come from R&D activities. See discussion on fertility and appropriability in Chapter 12.2. b. This proposal would probably lead to lower growth in poorer countries, but higher growth in rich countries. c. This proposal would lead to an increase in R&D spending. If fertility did not fall, there would be an increase in the rates of technological progress and output growth. d. Presumably, this proposal would lead to a (small) decrease in the fertility of applied research and therefore to a (small) decrease in growth....
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This note was uploaded on 10/17/2011 for the course ECON 102 taught by Professor Mankiw during the Spring '11 term at University of the Philippines Los Baños.

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Answer to exercises - Chapter 11 6 a K N = s(2 δ 2 Y N =s(4 δ b C N =(1 s Y N = s(1 s(4 δ c-e Y N increases with s C N increases until s =0.5

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