5.2 Consider the following economy: FYI: for this production function.) = A Parameter Investment rate (0) Depreciation rate (8) Y = AK³L³ Value 3% 5%

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75%
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5.2 Consider the following economy:
FYI: for this production function.(
Parameter
Value
Investment rate (0)
3%
5%
Depreciation rate (8)
Population growth (g)
25
Productivity level (A)
4%
Productivity Growth (ga)
Currently, the economy has a labour force of 5,000 and a capital stock equal to 15,000.
5.2.1 Calculate this country's current rate of economic growth.
5.2.2 How fast will country grow annually once its steady state is reached?
1 2
Y = AK³L³
¹)=A²
Transcribed Image Text:75% Find 5.2 Consider the following economy: FYI: for this production function.( Parameter Value Investment rate (0) 3% 5% Depreciation rate (8) Population growth (g) 25 Productivity level (A) 4% Productivity Growth (ga) Currently, the economy has a labour force of 5,000 and a capital stock equal to 15,000. 5.2.1 Calculate this country's current rate of economic growth. 5.2.2 How fast will country grow annually once its steady state is reached? 1 2 Y = AK³L³ ¹)=A²
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