Contribution of Capital in Growth Assignment Example | Topics and Well Written Essays - 500 words - 1

Contribution of great(p) in Growth - Assignment Exampleb) In such a model, the growth rate of siding is y/y =(SAnd), and therefore arise in depreciation cause a reduction in an economies output and since the growth rate of capital is a occasion of such depreciation and since they the increase in depreciation decreases capital stock. And since economic consumption is relative to output a decrease in output impacts in a similar way to consumption as they are positively related. Therefore it can be seen that increase in depreciation will reduce the capital stock, in the long run, reducing capital, capital-output per worker and fin all toldy consumption.At steady state the optimum capital is utilized and since the presidential term takes up all the units produced. The labor mogul utilizes all the capital available which the government takes up as indicated by hitch A. Also at this point, the government saves nothing since it utilizes everything in purchasing the entire output.b) increase in government purchases will cause an increase in productivity per worker but since the capital is a function of depreciation capital at the disposal of the workers will decrease in the long run do a reduction in the output per worker and consequently a reduction in consumption an increase in g cannot even match the growth of population or labor force of an economy.