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.
Chapter20: Economic Growth In The Global Economy
Section: Chapter Questions
Problem 1P
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