Consider the Solow Model of a closed economy where the aggregated capital, K, the aggregated labour force, L are related by the aggregate production function Y = K3 * L3, If the depreciation rate of capital is 1% per annum, the population growth rate is 2% per annum, the rate of technological progress is 2% per annum, and the annual savings rate is 20%, what is the long-run steady-state level of output per effective worker y? (Notes: the output per effective worker is defined as y = in the Solow Growth Model) [Note: you should give your answer to 3 significant figures.]

Consider the Solow Model of a closed economy where the aggregated capital, K, the aggregated labour force, L are related by the aggregate production function Y = K3 * L3, If the depreciation rate of capital is 1% per annum, the population growth rate is 2% per annum, the rate of technological progress is 2% per annum, and the annual savings rate is 20%, what is the long-run steady-state level of output per effective worker y? (Notes: the output per effective worker is defined as y = in the Solow Growth Model) [Note: you should give your answer to 3 significant figures.]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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