(a)
Determine the growth rate
(a)
Explanation of Solution
If k, l and m grows at constant rate, then the growth rate can be calculated as follows:
Thus, the growth rate is
(b)
Determine the value of growth rate
(b)
Explanation of Solution
If k, l and m grows at constant rate, then the growth rate can be calculated as follows:
Thus, the growth rate is
(c)
Determine the value of growth rate
(c)
Explanation of Solution
If k, l and m grows at constant rate, then the growth rate can be calculated as follows:
Thus, the growth rate is
(d)
Determine the value of growth rate
(d)
Explanation of Solution
If k, l and m grows at constant rate, then the growth rate can be calculated as follows:
Thus, the growth rate is
(e)
Determine the value of growth rate
(e)
Explanation of Solution
If k, l and m grows at constant rate, then the growth rate can be calculated as follows:
Thus, the growth rate is
(f)
Determine the value of growth rate
(f)
Explanation of Solution
If k, l and m grows at constant rate, then the growth rate can be calculated as follows:
Thus, the growth rate is
(g)
Determine the value of growth rate
(g)
Explanation of Solution
If k, l and m grows at constant rate, then the growth rate can be calculated as follows:
Thus, the growth rate is
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Chapter 3 Solutions
Macroeconomics (Fourth Edition)
- rowth: Homework Saved years Help Save & Ex Suppose that real GDP per capita in the United States is $53,500. If the long-term growth rate of real GDP per capita is 4.5% per year, how many years will it take for real GDP per capita to reach $107,000? Instructions: Enter your answer as a whole number. Chacarrow_forwardSweden and Norway are two neighboring countries in Northern Europe with similar savings rates, population growth rates, technology growth rates, and depreciation rates. However, Norway differs from Sweden in that Norway has large deposits of oil all along its coast, which makes it very easy for Norway to produce large quantities of crude oil every year with relatively little capital and labor. a) Draw a Solow Growth diagram that compares Sweden and Norway. What is the main difference between the two countries in the diagram? b) According to the Solow Growth Model, which country would have a higher standard of living in the long run? Which country would have a higher growth rate of its standard of living in the long run? c) Suppose now that, in the long run, oil becomes obsolete and has no value because it is uneconomical relative to renewable energy sources like solar and wind power. What would this do to your Solow Growth diagram in part a? How would the standard of living in Norway…arrow_forwardSuppose a country has a real GDP per capita of $68,000 and grows at a constant rate for the next 36 years. How much larger (in percentage terms) is this country if its growth rate is 4.33% instead of 3.13% after 36 years of growth? Answer this as a percentage and round your answer to two digits after the decimal without the percentage sign. ex. If you found the rate to be 5.125%, answer 5.13.arrow_forward
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