Question: An economy has the production function y = 20k 1/2 . The current capital stock is 100, the depreciation rate is 10 percent, and the

An economy has the production function y = 20k^1/2. The current capital stock is 100, the depreciation rate is 10 percent, and the population growth rate is 2 percent. For income per person to grow, the saving rate must exceed

a)6 percent.b)8 percent.c)10 percent.12 percent.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

A feed mixture containing 50 wt% n-heptane and 50 wt% methylcyclohexane (MCH) is to be separated by liquid-liquid extraction into one product containing 92.5 wt% methylcyclohexane and another...

An economy without population growth or technological progress has the production function y = 20k 2. The current capital stock is 100, the depreciation rate is 10%, and the population growth rate is...

Consider an economy described by the Solow model, with a Cobb-Douglas production function Y = AKOLI- a ", constant saving rate y and depreciation rate of capital equal to 8. (Note: A is total factor...

Consider an economy described by the production function: Y = F(K, L) = K0.3L0.7. a. What is the per-worker production function? b. Assuming no population growth or techno-logical progress, find the...

Suppose that the economywide expected future marginal product of capital is: MPK = 20 -0.02K where K is the future capital stock. The depreciation rate of capital, d, is 10% per period. The current...

Suppose that in the Solow growth model, the production function of a country is given as: Y =zK0.5 NO.5. The depreciation rate of capital is d = 0.09, population growth rate is n = 1%, and...

890..... CyrilFiggis, the managing director of theFiggisAgency is considering marketing a product that the company developed to get rid of ants. This product was developed as a result of the repeated...

Suppose that the production function of an economy is Cobb-Douglas: Yt : A K,\" L}'\" and where the population growth rate is 2% and the rate of depreciation of physical capital (5) is 6%, the share...

Question 1 Consider the following economy. The production function is FULL} = K~\"(AL)"'5. The saving rate and the depreciation rate are respectively: 5 = 0.20 and 45 = 0-05. There is no population...

Suppose that the economywide expected future marginal product of capital is: MPKf=200.02K, where K is the future capital stock. The depreciation rate of capital, d, is 15% per period. The current...

Why and how do states (countries) sponsor terrorism? Describe, with specific examples and details, three different instances of state-sponsored terrorism. In what way are they similar, and in what...

First Interstate Bank sued Central Bank of Denver over defaulted municipal bonds they purchased. Central Bank was the indenture trustee on the bonds and was responsible that a developer maintained...

Which of the following is an audit procedure that auditors most likely would perform concening itigation, clams, and assessments? Miltiple Choice Examine the legal documerts in the client's anomery...

You need to produce a buffer solution that has a pH of 5.46. You already have a solution that contains 10. mmol (millimoles) of acetic acid. How many millimoles of acetate (the conjugate base of...

Crude Oil Price Fluctuations between 1970-2018 Crude oil is an energy source that is integral to production processes across the economy. However, over the last 50 years, crude oil prices have...

Bivariate data for the quantitative variables x and y are given in the table below. These data are plotted in the scatter plot shown next to the table. In the scatter plot, sketch an approximation of...

It is estimated that, during the past year, 27% of all adults visited a therapist and 43% of all adults used non-prescription antidepressants. It is also estimated that 21% of all adults both visited...

Three wires of the same material and cross-section supports a rigid bar which further supports a weight of 5 kN. The length of the wires is 5m, 8m, and 6m in order. The spacing between the wires is...

Write a program to wish happy birthday to a student. Firstly, take today month and day as an input and secondly take birthday as an input in the form of month and day. If the input day and month...

7. List examples from a communication situation with a foreign person in which you have used the sauna manoeuvre (described in this chapter), and examples where you have been subjected to the...

1. To provide an understanding of how trust is established in a communication context.

2. In this chapter, the reader should reflect on the following concepts: Basic values, basic interests, position, socialization process, mental variables and norm distribution.