Home / Questions / Assume an output production function Y(t) = A(t)(1 — aL)L(t) and a production function of
Assume an output production function Y(t) = A(t)(1 — aL)L(t) and a production function of new ideas A(t) = B[atL''t'AB. Also, assume population grows at rate n. For the simple endogenous growth model, this setup implies gA(t) = 7n9A(t) + (0 — 1)gAW2, where gA(t) is growth rate of knowledge. (a) Why is either 0 < 1 and n > 0 or 0 = 1 and n = 0? Explain. (b) What is the equilibrium growth rate of output (per capita) if 0 = 1 and n = 0? (c) If 0 < 1 and n > 0, steady-state growth of knowledge is =gn. Why, in economic terms, does the steady-state knowledge growth rate increase in -y, n, and 0 (hint: discuss' in terms of the production functions)? (d) What is the equilibrium growth rate of output per capita if 0 < 1 and n > 0? Explain why.
2. Consider the role of different frictions in explaining why monetary policy shocks have real effects.
(a) In the imperfect competition/menu cost model of nominal rigidity, the flex-price equi-librium relative price is Pa P = where n > 1 is the elasticity of elasticity of demand for good i and 1/(y — 1) is the elasticity of labour supply with 7 > 1. Noting that Yi = Y and = Pin equilibrium, derive an expression for yi in terms of pi - Ebt -y, and q.
Dec 05 2019 View more View Less
Why do you think think Eurodollars are the major offshore currency? Does it have to do with the amount of business transacted in US dollars?
Apr 29 2021XYZ Company has 70 executives to whom it grants compensatory share options on January 1, 2013. The plan grants each executive options to acquire a maximum of 100 shares ...
Jun 24 2021Use the following information to work Problems 32 and 33. Suppose that in response to huge job losses in the U.S. textile industry, Congress imposes a 100 percent tariff ...
Aug 08 20201. List the names of states Kinder Morgan Inc. is qualified to do business and a list of those states in which it maintains significant operations. 2. Determine if t...
May 17 2018Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costin...
Jul 24 2021__________ is commonly referred to as the balance sheet approach.154. __________ is commonly referred to as the income statement approach.155. When inventory costs are r...
Jan 27 2020Diana acquires and places in service a 5-year class asset, costing $65,000, on December 19, 2018. Diana does not elect immediate expensing under § 179. She elects additio...
Sep 08 2020Materials issued for the current month are as follows: Requisition No. Material Job No. Amount 103.....................................Plastic..........................40...
Apr 24 2020Partnership Formation, Operation, and Changes in OwnershipThe partnership of Jordan and O’Neal began business on January 1, 20X7. Each partner con- tributed the following...
Jul 14 2020is the perceived fairness of the relation between what a person does and what the person receives.a. Distributive justiceb. Procedural justicec. Equityd...
Dec 16 2019