Consider a Solow–Swan model with saving rate s = 0.4, labour force growth gL = 0.05, constant productivity A = 1, and depreciation ?δ = 0.05. If output per worker is y = Y/L = 200 and capital per worker is k = K/L = 1000, which of the following is true? Group of answer choices - Effective depreciation per worker is 80, saving per worker is 100 and k will increase towards the steady state - Effective depreciation per worker is 100, saving per worker is 80 and k will decrease towards the steady state - Effective depreciation per worker is 100, saving per worker is 80 and k is at the steady
Consider a Solow–Swan model with saving rate s = 0.4, labour force growth gL = 0.05, constant productivity A = 1, and depreciation ?δ = 0.05. If output per worker is y = Y/L = 200 and capital per worker is k = K/L = 1000, which of the following is true? Group of answer choices - Effective depreciation per worker is 80, saving per worker is 100 and k will increase towards the steady state - Effective depreciation per worker is 100, saving per worker is 80 and k will decrease towards the steady state - Effective depreciation per worker is 100, saving per worker is 80 and k is at the steady
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider a Solow–Swan model with saving rate s = 0.4, labour force growth gL = 0.05, constant productivity A = 1, and
Group of answer choices
- Effective depreciation per worker is 80, saving per worker is 100 and k will increase towards the steady state
- Effective depreciation per worker is 100, saving per worker is 80 and k will decrease towards the steady state
- Effective depreciation per worker is 100, saving per worker is 80 and k is at the steady state
- Effective depreciation per worker is 80, saving per worker is 100 and k will decrease towards the steady state
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