2. An economy has a production function: Y 3KtLt. (1) The economy has a saving rate of 24 percent, a depreciation rate of 3 percent, 1 for all period (no population growth). and Lt Yt Lt (a) What is the per-worker production function, yt f(kt)? Define yt Ки Lt and kt (b) Find the equation for the evolution of capital per worker in terms of kt and kt+1 (c) Find the long-run growth rate of output per worker. Now the economy has the following production function: Y 3Kt (2) but savings rate, depreciation rate, and population remain the same Yt Lt f (kt)? Define yt (d) What is the per-worker production function, yt (e) Find the equation for the evolution of capital per worker in terms of kt and kt+1 (f) Find the long-run growth rate of output per worker. (g) Explain why the economy with production function (2) explain per- sistent growth without the assumption of exogenous technological progress. How does this differ from the economy with production func- tion (1)?
2. An economy has a production function: Y 3KtLt. (1) The economy has a saving rate of 24 percent, a depreciation rate of 3 percent, 1 for all period (no population growth). and Lt Yt Lt (a) What is the per-worker production function, yt f(kt)? Define yt Ки Lt and kt (b) Find the equation for the evolution of capital per worker in terms of kt and kt+1 (c) Find the long-run growth rate of output per worker. Now the economy has the following production function: Y 3Kt (2) but savings rate, depreciation rate, and population remain the same Yt Lt f (kt)? Define yt (d) What is the per-worker production function, yt (e) Find the equation for the evolution of capital per worker in terms of kt and kt+1 (f) Find the long-run growth rate of output per worker. (g) Explain why the economy with production function (2) explain per- sistent growth without the assumption of exogenous technological progress. How does this differ from the economy with production func- tion (1)?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![2. An economy has a production function:
Y 3KtLt.
(1)
The economy has a saving rate of 24 percent, a depreciation rate of 3 percent,
1 for all period (no population growth).
and Lt
Yt
Lt
(a) What is the per-worker production function, yt
f(kt)? Define yt
Ки
Lt
and kt
(b) Find the equation for the evolution of capital per worker in terms of kt
and kt+1
(c) Find the long-run growth rate of output per worker.
Now the economy has the following production function:
Y 3Kt
(2)
but savings rate, depreciation rate, and population remain the same](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3569fbec-2c2d-4614-bd62-3d9e0d93b510%2F380c35cc-5259-4f12-8c6b-6455b51da9a7%2Fm4hjvct.png&w=3840&q=75)
Transcribed Image Text:2. An economy has a production function:
Y 3KtLt.
(1)
The economy has a saving rate of 24 percent, a depreciation rate of 3 percent,
1 for all period (no population growth).
and Lt
Yt
Lt
(a) What is the per-worker production function, yt
f(kt)? Define yt
Ки
Lt
and kt
(b) Find the equation for the evolution of capital per worker in terms of kt
and kt+1
(c) Find the long-run growth rate of output per worker.
Now the economy has the following production function:
Y 3Kt
(2)
but savings rate, depreciation rate, and population remain the same
![Yt
Lt
f (kt)? Define yt
(d) What is the per-worker production function, yt
(e) Find the equation for the evolution of capital per worker in terms of kt
and kt+1
(f) Find the long-run growth rate of output per worker.
(g) Explain why the economy with production function (2) explain per-
sistent growth without the assumption of exogenous technological
progress. How does this differ from the economy with production func-
tion (1)?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3569fbec-2c2d-4614-bd62-3d9e0d93b510%2F380c35cc-5259-4f12-8c6b-6455b51da9a7%2Fi7opxn.png&w=3840&q=75)
Transcribed Image Text:Yt
Lt
f (kt)? Define yt
(d) What is the per-worker production function, yt
(e) Find the equation for the evolution of capital per worker in terms of kt
and kt+1
(f) Find the long-run growth rate of output per worker.
(g) Explain why the economy with production function (2) explain per-
sistent growth without the assumption of exogenous technological
progress. How does this differ from the economy with production func-
tion (1)?
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