econ 105 Assignment 3

econ 105 Assignment 3 - 3. a) Total output in each of the...

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1. a) Increased immigration means increased labor supply, which cause an increases of EPR, so real GDP will increase. However this could only increase the real GDP for a while, so the GDP would not change in long run. c) A decline in the tax rate on corporate profits can shift the investment curve rightward, thereby creating faster growth in physical capital. This leads to faster growth in productivity and so lead to an increase GDP in long run. d) A reduction of unemployment benefits cause an increase of labor supply, raising the EPR and increase the real GDP in short run, but the labor supply won't increase forever and as we are looking at the percentage change in the EPR to indicate the growth of GDP so for long run real GDP don't change.
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Unformatted text preview: 3. a) Total output in each of the five years from 2002 to 2006 are 9500, 9500, 9750, 9750, 10000. b) 1) Population growth rate from 2003 to 2006 are 4%, 2.9%, 0.93%, 1.9%. 2) Output growth rate from 2003 to 2006 are 0%, 2.6%, 0%, 2.6%. 3) Per capita output growth rate from 2003 to 2006 are -0.31%, -0.22%, -0.88%, -0.66%. 5. A decrease in the capital stock shifts the production function downward. Any policy which can cause an increase in tax rates decreases the reward for working, while an increases in certain benefit programs decreases the hardship of not working. Econ 105 Assignment 3 Yakun Yu 301158881...
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This note was uploaded on 02/18/2012 for the course ECON 105 taught by Professor Hanafiahharvey during the Spring '08 term at Simon Fraser.

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econ 105 Assignment 3 - 3. a) Total output in each of the...

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