Population Growth and Technological Progress-Work It Out An economy has a Cobb-Douglas production function: Y = K"(LE)¹- The economy has a capital share of 0.20, a saving rate of 49 percent, a depreciation rate of 4.00 percent, a rate of population growth of 1.50 percent, and a rate of labor-augmenting technological change of 4.0 percent. It is in steady state. a. At what rates do total output and output per worker grow? Total output growth rate: % Output per worker growth rate: %

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Population Growth and Technological Progress-Work It Out
An economy has a Cobb-Douglas production function:
Y = K (LE)¹-
The economy has a capital share of 0.20, a saving rate of 49 percent, a depreciation rate of 4.00 percent, a rate of population
growth of 1.50 percent, and a rate of labor-augmenting technological change of 4.0 percent. It is in steady state.
a. At what rates do total output and output per worker grow?
Total output growth rate:
Output per effective worker
is constant in the steady state and does not change.
increases in the steady state.
declines in the steady state.
%
Output per worker growth rate:
%
Transcribed Image Text:Population Growth and Technological Progress-Work It Out An economy has a Cobb-Douglas production function: Y = K (LE)¹- The economy has a capital share of 0.20, a saving rate of 49 percent, a depreciation rate of 4.00 percent, a rate of population growth of 1.50 percent, and a rate of labor-augmenting technological change of 4.0 percent. It is in steady state. a. At what rates do total output and output per worker grow? Total output growth rate: Output per effective worker is constant in the steady state and does not change. increases in the steady state. declines in the steady state. % Output per worker growth rate: %
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