Business, 25.12.2019 06:31, JamesLachoneus
Growth, capital, accumulation, and the economics of ideas: end of chapter problem 30. a small, less-developed country finds itself the recipient of a large amount of foreign direct investment that adds 50% to its current steady-state level of capital stock. this country seeks your advice about the long-term implications of that kind of . a. assume this country begins in a steady-state condition at y ss = kss, and show the short-run effects of a 50% increase in the steady-state level of capital stock such that ki = kss on the solow diagram. output (y), investment (1) b. what will the long-term effects of this increase in the capital stock be for this country? the long-term level of capital stock will return to kss the long-term level of capital stock will exceed kss. the long-term level of capital stock will fall below kss c. what potential problems should this country consider during the adjustment period described in part b? demand for domestic capital will decrease since foreign capital will replace worn-out domestic capital. consumption will decrease since capital will occupy a larger proportion of gdp. o savings will decrease since foreign capital will reduce the need for domestic investment. d. what must this country do in order to gain any permanent long-term benefits from this increase in its capital stock? select all actions which would be . decrease the savings rate (7) decrease the depreciation rate (8) increase the depreciation rate (8) increase the savings rate (7)
Answers: 1
Business, 22.06.2019 00:10, laya35
What are the forecasted levels of the line of credit and special dividends? (hints: create a column showing the ratios for the current year; then create a new column showing the ratios used in the forecast. also, create a preliminary forecast that doesn’t include any new line of credit or special dividends. identify the financing deficit or surplus in this preliminary forecast and then add a new column that shows the final forecast that includes any new line of credit or special dividend.) now assume that the growth in sales is only 3%. what are the forecasted levels of the line of credit and special dividends?
Answers: 1
Growth, capital, accumulation, and the economics of ideas: end of chapter problem 30. a small, less...
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