Definitely a thump up for who answers them Thanks For this p

Definitely a thump up for who answers them. Thanks!

For this problem think about wage-setting and price-setting, incorporating expectations about productivity (as in Chapter 13). Suppose an economy experiences technological change at rate gA, depreciation at rate ?, and population growth at rate A. Furthermore, the economy saves at a constant rate (s). If the economy is in steady state, and the unemployment rate is at the natural level (un), we would expect The natural unemployment rate to remain at the same level if nothing else changes in the economy The natural unemployment rate to decrease over time if nothing else changes in the economy The natural unemployment rate to increase over time if nothing else changes in the economy None of the options listed

Solution

1) answer is option a )

2) option b & c

3) option a & c

4) option a & c, from solow convergence hypothesis; Now G will have higher effective output growth since it\'s capital stock is lower but output of H will be higher.

5) option a & c, solow convergence hypothesis will be applied, since E has now half of capital stock so it\'s convergent speed will be high temporarily , but F\'s output will be higher

6) Rate of technology progress gA is equal to real GDP growth at steady state so answer is option a