In the Solow model, a productivity improvement causes the Golden Rule
consumption per worker to increase..
Suppose that there are only two large countries, home and foreign. Other things
equal, a raise in the investment tax credit of the home country causes the level
of investment of the foreign country to fall.
In the short run, a higher expected inflation rate results in a higher inflation rate
and a higher unemployment rate.
Other things equal, a higher real interest rate results in lower current
consumption.
In the IS-LM and AD-AS models, the short-run equilibrium interest rate and
the short-run equilibrium general price level move in the same direction.
According to the efficiency wages model, a beneficial supply shock causes the
unemployment rate to fall.
Date shows that Taiwanese aboriginal people’s wage rates are lower than other
people. (16%)
(1) Please use the formation of labor-supply and labor-demand, as well as the
concept of equilibrium to explain this wage difference. (8%)
(2) Suppose the government forces firms to pay the same wage to all people.
Please discuss and illustrate the economic impact of this regulation. (8%)
Data shows that the Taiwanese real national income per capita was NT 26,603
in 1951 and NT 471,405 in 2009. Could you use the Solow-Swan neoclassical
growth model to explain this phenomenon? If yes, please explain. If no, please
provide another model to explain this phenomenon. (12%)
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