econ105 week 5 hw (1)

econ105 week 5 hw (1) - b) Calculate the following for each...

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1. For each of the following illustrate the immediate and long-run impact on real GDP using the classical model (labor market, production function, or loanable funds market)and state what happens to real GDP(increase, decrease, or remain unchanged). a) Increased immigration C)A decline in the tax rate on corporate profits d)A reduction of unemployment benefits 3. Below are hypothetical data for the country of Barrovia: Population(million s ) Employment(millio ns) Average Yearly Hours Labor Productivity(outp ut per hour) Total Yearly Output 2002 100 50 2,000 $4.75 -- 2003 104 51 2,000 $4.75 -- 2004 107 53 1,950 $5.00 -- 2005 108 57 1,950 $5.00 -- 2006 110 57 2,000 $5.00 -- a) Fill in the entries for total output in each of the five years.
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Unformatted text preview: b) Calculate the following for each year (except 2002): (1) Population growth rate (from previous year) (2) Growth rate of output (from previous year) (3) Growth rate of per capita output(from previous year) 5. Show what would happen to the production function if the capital stock decreased. Suppose,too, that the decrease in the capital stockbecause it made workers less productive to firmsshifted the labor demand curve leftward. Graphically illustrate the full impact of a decrease in the nations capital stock under this assumption. What government policies could cause a decrease in the capital stock?...
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