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averages for the economy of Solovia over the last 50 years:

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10. (18 points) The data below describe averages for the economy of Solovia over the last 50 years;National Savings Rate: 22.0%;National Income Share of Capital: 40.0%;National Income Share of Labor: 60.0%;Annual Growth of Labor Inputs: 1.0%;Annual Growth of Capital Inputs: Same as Growth in Real GDP;Technical Progress: 1.2%;Annual Money Supply Growth: 5.8%;Annual Growth in Monetary Velocity: 0.4%;a. What has been the average growth in total gdp in Solovia during this time? Explain.;b. What has been the average growth in gdp per worker in Solovia? Explain.;c. What has been the average inflation rate in Solovia over the past 50 years? Explain.;d. Some analysts have claimed that Solovians need to raise their national savings rate.;i. On what basis can this argument be made?;ii. What will be the long-run effects of such an increase in the savings rate? How differ from the long run?;iii. What might be the short-run effects of such an increase in the savings rate?

 

Paper#21643 | Written in 18-Jul-2015

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