11S_Quiz2 - (d) (1.5 marks) Define the Golden Rule level of...

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Name ___________________ Econ 204: Intermediate Macroeconomics Quiz 2, Spring 2011 1. Consider an economy described by the production function: ± ²³´µ ¶· ± ´ ¸ ¹º¸ (a) (0.5 marks) What is the per worker production function? (b) (1.5 marks) Consider Solow model with population growth. Calculate the steady-state (SS) capital per worker, output per worker, and consumption per worker as a function of saving rate, depreciation rate and α . (c) (0.5 marks) Demonstrate the SS solution in a diagram.
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Unformatted text preview: (d) (1.5 marks) Define the Golden Rule level of capital. Under what condition Golden Rule level of capital stock is achieved? Illustrate in a diagram. (e) (1 marks) What is balanced growth in steady state by Solow? What is the growth rate of output per worker on the balance growth path (BGP)? Bonus (1 mark) Briefly explain why real wage grows at the same rate with output per worker on the BGP....
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11S_Quiz2 - (d) (1.5 marks) Define the Golden Rule level of...

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