1. Suppose that a country's production function is Y = 2VKVAN and that the savings rate, s, is equal to 20% and the depreciation rate, 6, is 10%. Suppose further that the labor force grows by 1% each year and that the rate of technological progress is 6% per year. Part (a): Calculate the values of (i) the steady-state level of capital per effective worker (ii. the steady-state level of output per effective worker (iii) the growth rate of output per effective worker (iv) the growth rate of output per worker (v) the growth rate of output

1. Suppose that a country's production function is Y = 2VKVAN and that the savings rate, s, is equal to 20% and the depreciation rate, 6, is 10%. Suppose further that the labor force grows by 1% each year and that the rate of technological progress is 6% per year. Part (a): Calculate the values of (i) the steady-state level of capital per effective worker (ii. the steady-state level of output per effective worker (iii) the growth rate of output per effective worker (iv) the growth rate of output per worker (v) the growth rate of output

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3. Y₁ = 3k+0.5 St = 0.3Yt d = 0.1 n = 0.05 What are the steady-state values of the capital-labor ratio k, output per worker y, and consumption per worker?
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