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Macroeconomics Assignment (Doc)

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Added on  2020-03-16

Macroeconomics Assignment (Doc)

   Added on 2020-03-16

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Running Header: MACROECONOMICS1MACROECONOMICSStudent's name:Institution:Professor's name:Course Code:
Macroeconomics Assignment (Doc)_1
Macroeconomics2Part A1. Output per worker as a function of capital per workerY = AKαN1-αY/N = (AKαN1-α)/Ny = AKαN1-ΑN-1y = AKαNy = A(KN)αy = AkαOutput per worker as a function of capital per worker and productivityy/A = Akα/Ay = kα2. When the capital per worker is the same yet country A output per worker is twice the level of country B, then country A is twice productive than country B. Thus, productivity of country A is2kα while the productivity of country B is kα.3. Output per worker of A = ytOutput per worker of B = (1/2)*ytDoubling output per worker of B = (2*(1/2)*yt) = yt
Macroeconomics Assignment (Doc)_2
Macroeconomics3Thus, if the prime minister of country B doubles the level of capital per worker, his country will become as rich as country A.4. Output per worker of B is 0.5ytOutput per worker of A is 1ytIt = sYtIt/N = sYt/NIt/N = syt0.05*0.5yt = It/1It = 0.025ytSince It is the same, then:0.025yt = sytTherefore s of A is 0.0256.Consumption of B:Ct/N = (1-s)Yt/Nct = (1-s)yt
Macroeconomics Assignment (Doc)_3

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