Equations

Question 1

Equation for GDP

Answer 1

Y = C + I + G + NX
Y = GDP (in dollars),
C = consumption,
I = investment,
G = government purchases, and
NX = net exports = exports − imports.

Question 2

Equation for Production Function in Solow

Answer 2

Y = F (K,L) = AK^(1/3)L^(2/3)

Question 3

Equation for the output per person at the steady state

Answer 3

y* = A^(3/2) * (s/d)^(1/2)

Question 4

Equation for change in capital

Answer 4

ΔK = sY - dK

Question 5

Capital-output ratio

Answer 5

K/Y = s/d

Question 6

What are the unknowns in the Romer model

Answer 6

Y,A,Lyt,Lat

Question 7

Romer model output production function

Answer 7

Y = ALyt

Question 8

Idea production function - Romer

Answer 8

ΔAt+1=zAtLat

Question 9

Resource constraint - Romer

Answer 9

Lyt + Lat = L

Question 10

Allocation of labour - Romer

Answer 10

Lat = lL

Question 11

Parameters in the Romer model

Answer 11

z, L, l, A0

Question 12

Output per person equation - Romer

Answer 12

yt = A0(1-l)(1+g)^t

Question 13

Growth rate in the Romer model

Answer 13

gyt = gat + 1/3 gkt + 2/3 glyt

Question 14

Growth rate in the Solow-Romer model

Answer 14

g*y = 3/2 g = 3/2zlL

Question 15

Actual unemployment equation

Answer 15

actual unemployment = frictional + structural + cyclical

Question 16

Natural unemployment equation

Answer 16

Natural = frictional + structural

Question 17

Change in employment equation

Answer 17

ΔUt+1 = sEt - fUt

Question 18

Unemployment rate equation

Answer 18

u* = s/(f+s)

Question 19

Intertemporal budget constraint

Answer 19

c + c’/(1+r) = f + y + y’/(1+r)

Question 20

Indifference equation/Euler equation

Answer 20

u’(c) = B(1+r)u’(c’)