1. A country has the per-worker production function: Y. = where y, is output per worker and k, is the capital-labor ratio. The depreciation rate is 0.1 and the population growth rate is 0.1. The saving function is S = 0.1Y, where S, is total national saving and Y, is total output. a) What is the steady-state value of capital-labor ratio? b) What is the steady-state value of output per worker? c) What is the steady-state value of consumption per worker? Answer:

1. A country has the per-worker production function: Y. = where y, is output per worker and k, is the capital-labor ratio. The depreciation rate is 0.1 and the population growth rate is 0.1. The saving function is S = 0.1Y, where S, is total national saving and Y, is total output. a) What is the steady-state value of capital-labor ratio? b) What is the steady-state value of output per worker? c) What is the steady-state value of consumption per worker? Answer:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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