Beginning from a steady state in the Solow growth model,
explain how an increase in the savings rate will affect the levels
and growth rates of capital and output per worker?
The Solow growth model
Suppose an economy was in steady state with population growing
at 2% yearly, and suddenly its population growth rate doubles to 4%
yearly. What happens to this economy in the short and long run?
Illustrate with a diagram.
Draw the Solow diagram for the General Solow Model and clearly
indicate the steady state. Starting from the original each time,
draw in any changes and indicate any change in k~* and y~* if there
is a decrease in n.
1. i) What are the main features of the Solow growth model?
Explain how the steady state level of capital determined in the
Solow growth model. Why is the steady state stable? Explain your
answer with a diagram.
ii) Explain the main features of the balanced growth path
implied by the Solow growth model.
iii) Can austerity policies can have a positive effect on
growth? Using economic knowledge, assess that statement in the
context of the Solow growth model.
1. What determines the natural rate of unemployment?
2. In the Solow model, how does the saving rate affect the
steady-state level of income? How does it affect the steady-state
rate of growth?
3. Why might an economic policymaker choose the Golden Rule
level of capital?
4. In the Solow model, how does the rate of population growth
affect the steady-state level of income? How does it affect the
steady-state rate of growth?
In the Solow model, how does the folowing shocks
aect
the steady state values of income per person (y
∗
), capital per worker
(k
∗
) and investment per person (i
∗
). Explain and graph the following
shocks:
In the Solow model, how does the folowing shocks
aect
the steady state values of income per person (y
∗
), capital per worker
(k
∗
) and investment per person (i
∗
). Explain and graph the following
shocks:...
(a) In the Solow Model, how does the saving rate affect the
steady-state level of income? How does it effect the steady-state
rate of growth? Discuss.
(b) Why an economic policymaker choose the Golden rule level of
capital?
(c) How does the rate of population growth affect the
steady-state level of income? Does it affect the steady-state rate
of growth?
(d) How can the policy maker influence a nation’s saving rate?
Explain
Discuss the roots and implications of the Solow model. How does
the Solow model predict convergence? What are the conditions of
convergence? How well did the Solow model perform in explaining
growth? Make sure you discuss the recent evidence on the
convergence debate.
1. Explain briefly the meaning of price leadership model in
oligopoly market?
2. State how the cartel deal can succeed in the oligopoly
market?
3. Senaraikan empat faktor kewujudan monopoli.