1. (3 points) Suppose the depreciation rate of capital decreases in a permanent manner. Use the...

 

Transcribed Image Text:

1. (3 points) Suppose the depreciation rate of capital decreases in a permanent manner. Use the Solow growth model to explain the impacts of this event on the following variables in the short run and the long run. a. Capital per worker. b. Output per worker. Consumption per worker. c. 2. (3 points) Suppose the population growth rate decreases in a permanent manner Use the Solow growth model to explain the impacts of this event on the following variables in the short run and the long run. I a. Capital per worker. b. Output per worker. c. Consumption per worker. 3. (4 points) Suppose the population decreases in a permanent manner. Use the Romer model to answer the questions below. a. Explain the impact on technological progress in the short run and the long run. b. Explain the impact on income per capita in the short run and the long run. c. Suppose the government aims to prevent income per capita from changing in response to the permanent decrease in population. Will a capital tax cut help to achieve the goal? Explain your reasoning. d. Suppose the government aims to prevent income per capita from changing in response to the permanent decrease in population. Will importing foreign scientists and engineers help to achieve the goal? Explain your reasoning. 1. (3 points) Suppose the depreciation rate of capital decreases in a permanent manner. Use the Solow growth model to explain the impacts of this event on the following variables in the short run and the long run. a. Capital per worker. b. Output per worker. Consumption per worker. c. 2. (3 points) Suppose the population growth rate decreases in a permanent manner Use the Solow growth model to explain the impacts of this event on the following variables in the short run and the long run. I a. Capital per worker. b. Output per worker. c. Consumption per worker. 3. (4 points) Suppose the population decreases in a permanent manner. Use the Romer model to answer the questions below. a. Explain the impact on technological progress in the short run and the long run. b. Explain the impact on income per capita in the short run and the long run. c. Suppose the government aims to prevent income per capita from changing in response to the permanent decrease in population. Will a capital tax cut help to achieve the goal? Explain your reasoning. d. Suppose the government aims to prevent income per capita from changing in response to the permanent decrease in population. Will importing foreign scientists and engineers help to achieve the goal? Explain your reasoning.

Answer rating: 100% (QA)

1 Impact of Decreasing Depreciation Rate in the Solow Growth Model a Capital per Worker Short Run Initially capital per worker increases as depreciati... View the full answer