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Assume that the Indonesian economy can be reflected in the production function: Y = FIK,L) = K 0$L 05. Assume that the depreciation rate is 8%, the saving rate is 20%, and the population growth is 2%. There is no technological progress. a. Using the Solow growth model, calculate the steady state value of: (1) capital per labor, (ii) income per labor, (ii) consumption per labor. o. Calculate the golden rule level of capital per labor.

Assume that the Indonesian economy can be reflected in the production function: Y = FIK,L) = K 0$L 05. Assume that the depreciation rate is 8%, the saving rate is 20%, and the population growth is 2%. There is no technological progress. a. Using the Solow growth model, calculate the steady state value of: (1) capital per labor, (ii) income per labor, (ii) consumption per labor. o. Calculate the golden rule level of capital per labor.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Assume that the Indonesian economy can be reflected in the production function: Y = F(K,L) = K 0$L 05, Assume that the depreciation rate is 8%, the saving rate is 20%, and the population growth is 2%. There is no technological progress. a. Using the Solow growth model, calculate the steady state value of: (1) capital per labor, (ii) income per labor, (ii) consumption per labor. o. Calculate the golden rule level of capital per labor.
Transcribed Image Text:Assume that the Indonesian economy can be reflected in the production function: Y = F(K,L) = K 0$L 05, Assume that the depreciation rate is 8%, the saving rate is 20%, and the population growth is 2%. There is no technological progress. a. Using the Solow growth model, calculate the steady state value of: (1) capital per labor, (ii) income per labor, (ii) consumption per labor. o. Calculate the golden rule level of capital per labor.
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