Examlex

Solved

Given the Production Function Y = a K0

question 52

Essay

Given the production function Y = A K0.3L0.7 and fixed values for the saving rate and depreciation, if productivity is growing at an average rate of three percent, and the labor input grows at two percent, there is a unique growth rate of capital that is sustainable. That is, if the growth rate of capital is either higher or lower than this steady-state value, then it must eventually change, even if nothing else in the economy changes. Calculate this steady-state growth rate of capital, and explain why it alone is a sustainable rate. [Hint: Use the fact that the growth rates of output and capital per worker are 43% higher than the growth rate of productivity.]


Definitions:

The Occult

Refers to mystical, supernatural, or magical beliefs, practices, or phenomena beyond the scope of scientific understanding.

The Supernatural

Pertaining to entities, forces, or phenomena that are beyond the natural world and cannot be explained by natural law.

Word-association Test

A psychological assessment where subjects are prompted with words and asked to respond quickly with related words, aiming to explore their subconscious connections.

Projective Technique

A psychological assessment tool that uses ambiguous stimuli to elicit responses that reveal aspects of an individual's personality.

Related Questions