In the United States, the capital share of GDP is about 30 percent; the average growth in output is abour 3 percent per year, the depreciation rate is about 4 percent per year; and the capital-out- pút ratio is about 2.5. Suppose that the produc- tion function is Cobb-Douglas, so that the capi- tal share in output is constant, and that the United States has been in a steady state. a. What must the saving rate be in the initial steady state? (Hint: Use the steady-state rela- tionship, sy = (8 +n+ g)k.]

In the United States, the capital share of GDP is about 30 percent; the average growth in output is abour 3 percent per year, the depreciation rate is about 4 percent per year; and the capital-out- pút ratio is about 2.5. Suppose that the produc- tion function is Cobb-Douglas, so that the capi- tal share in output is constant, and that the United States has been in a steady state. a. What must the saving rate be in the initial steady state? (Hint: Use the steady-state rela- tionship, sy = (8 +n+ g)k.]

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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