An economy has production function Y = K1/2L1/2, a savings rate of 60 percent. There is no technological progress or labour force growth. The depreciation rate initially 10 percent, increases to 40 percent. There are 400 workers in this economy. When the depreciation rate is 40 percent, output will be equal to dollars.

An economy has production function Y = K1/2L1/2, a savings rate of 60 percent. There is no technological progress or labour force growth. The depreciation rate initially 10 percent, increases to 40 percent. There are 400 workers in this economy. When the depreciation rate is 40 percent, output will be equal to dollars.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter20: Economic Growth

Section: Chapter Questions

Problem 11SCQ: Would you expect capital deepening to result in diminished1etmns? Why or why not? Would you expect...

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An economy has production function Y = K¹/2L¹/2, a savings rate of 60 percent. There is no technological
progress or labour force growth. The depreciation rate initially 10 percent, increases to 40 percent. There are
400 workers in this economy. When the depreciation rate is 40 percent, output will be equal to
dollars.

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