Suppose that the economy's production function is given by Y=√K√N, where Y is output, K is capital, and N is the number of workers. The steady-state level of capital per worker in terms of the saving rate, s, and the depreciation rate, 8, is KIN= (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a superscript can be created with the character.) The steady-state level of output per worker in terms of the saving rate, s, and the depreciation rate, 8, is YIN = (Properly format your expression using the tools in the palette.) Suppose that the saving rate, s, is initially 15% per year (0.15), and the depreciation rate, 8, is 7.5 % (0.075). The steady-state capital stock per worker = (Enter your response as an integer.)
Suppose that the economy's production function is given by Y=√K√N, where Y is output, K is capital, and N is the number of workers. The steady-state level of capital per worker in terms of the saving rate, s, and the depreciation rate, 8, is KIN= (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a superscript can be created with the character.) The steady-state level of output per worker in terms of the saving rate, s, and the depreciation rate, 8, is YIN = (Properly format your expression using the tools in the palette.) Suppose that the saving rate, s, is initially 15% per year (0.15), and the depreciation rate, 8, is 7.5 % (0.075). The steady-state capital stock per worker = (Enter your response as an integer.)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that the economy's production function is given by
Y=√K√N,
where Y is output, K is capital, and N is the number of workers.
The steady-state level of capital per worker in terms of the saving rate, s, and the depreciation rate, 8, is
KIN= (Properly format your expression using the tools in the palette. Hover over tools to see keyboard
shortcuts. E.g., a superscript can be created with the character.)
The steady-state level of output per worker in terms of the saving rate, s, and the depreciation rate, 8, is
YIN = (Properly format your expression using the tools in the palette.)
Suppose that the saving rate, s, is initially 15% per year (0.15), and the depreciation rate, 8, is 7.5 % (0.075).
The steady-state capital stock per worker = (Enter your response as an integer.)
The steady-state output per worker = (Enter your response as an integer.)
Suppose that there is a government deficit of 5% of GDP and that the government eliminates this deficit. Assume that
private saving is unchanged so that the natichal saving rate increases to 20%, or s = 0.2.
The new steady-state capital stock per worker =
(Round your response to two decimal places.)
The new steady-state output per worker = (Round your response to two decimal places.)
From the numbers above, we see that increases in the saving rate cause capital per worker and output per worker to
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