i need help with 11 and 20 with justification 3. Consider the Solow growth model with the production function, Y = F(K, L) = Ā× K + B × L where Ã >0 and B > 0. Denote k = K/L. Let à denote the depreciation rate and 5 the saving rate. There exists apositive steady state (with k>0):a. AlwaysNeverb.c. If Ā > B.d.If d > šĀ.e. If d < 511. Consider the Solow growth model with aggregate production function F(K, L) = ĀK¹/² L¹/2. Per capita GDPat the steady state is y=Y/L=a. (sÃ/d)².b. (d/sÃ)².c. d/sÃ.20. Consider the Solow growth model where we add government purchases, G. According to the expenditureapproach of GDP, Y=C+I+G. Suppose G = gY, where is a number between 0 and 1. Governmentpurchases are financed with taxes, T = G. Agents invest a fraction 5 of their disposable income, Y-T.Formally, I = 5(Y – T). The steady-state capital per worker, k = K/L, solves:sgf (k)= dkd.s(1 - d)f(k) = gksdf (k) = gke.a.b.a.b.C.C.d.e.š(1 − g)ƒ (k) = dksf (k) = gk21. Consider the Solow growth model where we add government purchases, G. According to the expenditureapproach of GDP, Y=C+I+G. Suppose G = gY, where is a number between 0 and 1. Governmentpurchases are financed with taxes, T = G. Agents invest a fraction 5 of their disposable income, Y-T.Formally, I = 5(Y – T). A permanent increase in the share of government consumption, ā, leads to:An increase in steady-state GDPd. An increase in private consumption but no effect onGDPA decrease in steady-state GDPA decrease in private consumption but noeffect on GDPSA²/d.SÃ/d.e.A decrease in private consumption and an increasein the capital stock

“Since you have asked multiple questions, we will solve one question at a time. So we will solve…

Answered: Consider the Solow growth model with…

Consider the Solow growth model with aggregate production function F(K, L) = ĀK¹/² L¹/2. Per capita GDP at the steady state is y=Y/L= a. (5Ā/d)². b. (d/sÃ)². c. d/5A. d. e. SÃ²/d. SÃ/d.

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Question

i need help with 11 and 20 with justification

3. Consider the Solow growth model with the production function, Y = F(K, L) = Ā× K + B × L where Ã >
0 and B > 0. Denote k = K/L. Let à denote the depreciation rate and 5 the saving rate. There exists a
positive steady state (with k>0):
a. Always
Never
b.
c. If Ā > B.
d.
If d > šĀ.
e. If d < 5
11. Consider the Solow growth model with aggregate production function F(K, L) = ĀK¹/² L¹/2. Per capita GDP
at the steady state is y=Y/L=
a. (sÃ/d)².
b. (d/sÃ)².
c. d/sÃ.
20. Consider the Solow growth model where we add government purchases, G. According to the expenditure
approach of GDP, Y=C+I+G. Suppose G = gY, where is a number between 0 and 1. Government
purchases are financed with taxes, T = G. Agents invest a fraction 5 of their disposable income, Y-T.
Formally, I = 5(Y – T). The steady-state capital per worker, k = K/L, solves:
sgf (k)= dk
d.
s(1 - d)f(k) = gk
sdf (k) = gk
e.
a.
b.
a.
b.
C.
C.
d.
e.
š(1 − g)ƒ (k) = dk
sf (k) = gk
21. Consider the Solow growth model where we add government purchases, G. According to the expenditure
approach of GDP, Y=C+I+G. Suppose G = gY, where is a number between 0 and 1. Government
purchases are financed with taxes, T = G. Agents invest a fraction 5 of their disposable income, Y-T.
Formally, I = 5(Y – T). A permanent increase in the share of government consumption, ā, leads to:
An increase in steady-state GDP
d. An increase in private consumption but no effect on
GDP
A decrease in steady-state GDP
A decrease in private consumption but no
effect on GDP
SA²/d.
SÃ/d.
e.
A decrease in private consumption and an increase
in the capital stock

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