Please help me answer 11-14 Figure 5.1: Solow DiagramINVESTMENT.DEPRECIATIONa. decrease; growb.increase; growC.stay constant; shrinkK₂ K3 CAPITAL, K11. In Figure 5.1, if the economy begins with the initial capital stock at K₁, the capital stock willthe economy willa.b.K₁dk12. In the equation Y = F(K, L) =ĀK¹/3L2/3, the "bar" over the A means that it is a:parameter that is endogenous.variable that is fixed but not exogenous.I= SYΔεthe change in k over time, Ak, is equal to:ea. Ak¹/3 - dkb. Ak¹/3+g-dkc. SĀK¹/3+ (9- d)kC.variable that is exogenous, either constant or varying over time.d.variable that is endogenous.e. parameter that is fixed and endogenous.a.b.C.d.decrease; shrinke. stay constant; growY = 6Y = 143. Consider a Solow growth model with production function Y = F(K, L) =ĀK1/3 (eL) 2/3, where e is anexogenous variable that measures the efficiency of an hour of work. Suppose L is constant but e grows at theconstant rate >0. We denote k = K/(eL) the capital stock per effect unit of labor. Using that kAk AKK14. If the production function is given by Y = AK¹/³L2/3 and Ã = 1 and K = L = 8, total output equals:Y = 2d. Y=8e.d. SÃk¹/3 (+ d)kAk¹/3 - (g- d)ke.andNone of these answers is correct

The solow model explains the short run and long run growth of economy through the capital…

Answered: gure 5.1: Solow Diagram NVESTMENT,…

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gure 5.1: Solow Diagram NVESTMENT, EPRECIATION dk

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Question

Please help me answer 11-14

Figure 5.1: Solow Diagram
INVESTMENT.
DEPRECIATION
a. decrease; grow
b.
increase; grow
C.
stay constant; shrink
K₂ K3 CAPITAL, K
11. In Figure 5.1, if the economy begins with the initial capital stock at K₁, the capital stock will
the economy will
a.
b.
K₁
dk
12. In the equation Y = F(K, L) =ĀK¹/3L2/3, the "bar" over the A means that it is a:
parameter that is endogenous.
variable that is fixed but not exogenous.
I= SY
Δε
the change in k over time, Ak, is equal to:
e
a. Ak¹/3 - dk
b. Ak¹/3+g-dk
c. SĀK¹/3+ (9- d)k
C.
variable that is exogenous, either constant or varying over time.
d.
variable that is endogenous.
e. parameter that is fixed and endogenous.
a.
b.
C.
d.
decrease; shrink
e. stay constant; grow
Y = 6
Y = 14
3. Consider a Solow growth model with production function Y = F(K, L) =ĀK1/3 (eL) 2/3, where e is an
exogenous variable that measures the efficiency of an hour of work. Suppose L is constant but e grows at the
constant rate >0. We denote k = K/(eL) the capital stock per effect unit of labor. Using that k
Ak AK
K
14. If the production function is given by Y = AK¹/³L2/3 and Ã = 1 and K = L = 8, total output equals:
Y = 2
d. Y=8
e.
d. SÃk¹/3 (+ d)k
Ak¹/3 - (g- d)k
e.
and
None of these answers is correct

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