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Author Question: Given the production function Y = A if output grows by five percent, the capital input grows by five ... (Read 42 times)

bobbie

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on: Jun 30, 2018
Given the production function Y = A if output grows by five percent, the capital input grows by five percent, and the labor input grows by two percent, calculate the Solow residual.
 
  Calculate the growth rates of output per worker and capital per worker.

Question 2

In the classical model, people hold money because
 
  a. it is a way to save.
  b. it makes trade easier.
  c. it is the way to measure the value of goods and services.
  d. it is an asset.


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stillxalice

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Reply #1 on: Jun 30, 2018
Answer to Question 1

The Solow residual = 0.05 - 0.3  0.05 - 0.7  0.02 = 0.021. The growth rate of output per worker is 0.05 - 0.02 = 0.03, which is also the growth rate of capital per worker.

Answer to Question 2

B


bobbie

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Reply 2 on: Jun 30, 2018
Thanks for the timely response, appreciate it

elyse44

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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