Suppose that the production function is Y=K^((1)/(3))(EL)^((2)/(3)) where E is the efficiency of labor. (a) Derive the per-efficiency-unit-of-labor production function. (i.e., y=f(k)= Y//EL) (b) Solve for the steady state value of y as a function of s,n,g, and d (c) A developed country has a savings rate of 28% and a population growth rate of 1% per year. A less-developed country has a saving rate of 10% and a population growth of 4% per year. In both countries, g=0.02 and d=0.04. Find the steady state value
Suppose that the production function is Y=K^((1)/(3))(EL)^((2)/(3)) where E is the efficiency of labor. (a) Derive the per-efficiency-unit-of-labor production function. (i.e., y=f(k)= Y//EL) (b) Solve for the steady state value of y as a function of s,n,g, and d (c) A developed country has a savings rate of 28% and a population growth rate of 1% per year. A less-developed country has a saving rate of 10% and a population growth of 4% per year. In both countries, g=0.02 and d=0.04. Find the steady state value
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that the production function is Y=K^((1)/(3))(EL)^((2)/(3))
where E is the efficiency of labor.
(a) Derive the per-efficiency-unit-of-labor production function.
(i.e., y=f(k)= Y//EL)
(b) Solve for the steady state value of y as a function of s,n,g, and d
(c) A developed country has a savings rate of 28% and a population growth rate of 1% per year. A less-developed country has a saving rate of 10% and a population growth of 4% per year. In both countries, g=0.02 and d=0.04. Find the steady state value
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