Suppose the production is given by Y=0.5*K13(AN)23. Suppose the depreciation rate is 2%, number of workers grows at 2% per year and rate of technological progress is 3% per year. a. If the saving rate is 14% then find the steady state values of capital per uni of effect worker and output per unit of effective worker. a. Suppose the economy is at steady state with saving rate being equal to 14%. Now suppose the savings rate increases to 15% from 14%. VWhat wil be the capital per unit of effective worker one year after the change in savings rate? Show your calculations for both (a) and (b).

Suppose the production is given by Y=0.5*K13(AN)23. Suppose the depreciation rate is 2%, number of workers grows at 2% per year and rate of technological progress is 3% per year. a. If the saving rate is 14% then find the steady state values of capital per uni of effect worker and output per unit of effective worker. a. Suppose the economy is at steady state with saving rate being equal to 14%. Now suppose the savings rate increases to 15% from 14%. VWhat wil be the capital per unit of effective worker one year after the change in savings rate? Show your calculations for both (a) and (b).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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9. Suppose there is no population or technological growth. Define k as the capital-to-labor ratio. If the per worker production function is given by y = ¹/2, the saving ratio is 0.3, and the depreciation rate is 0.1, then the steady state capital per worker ratio is (a) 1 (b) 2 (c) 4 (d) 6 9
3. Y₁ = 3k+0.5 St = 0.3Yt d = 0.1 n = 0.05 What are the steady-state values of the capital-labor ratio k, output per worker y, and consumption per worker?
In this problem, we distinguish between labor and population in the Solow growth model. A proportion of the population, a, between zero and one, works. The production function is now written as Y = A(K^1/3)[(aL)^2/3] (a) How does an increase in a from 0.3 to 0.6 change steady state GDP? (b) Does it change the steady-state capital? Explain. (c) Suppose a rises steadily over time. How do you think would affect the growth rate of GDP?
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Suppose that the per hour worked form of the production function for an economy is given by y = 10k03 The depreciation rate is 11%, the saving rate is 21%, and the growth rate of labor hours is 7%. The steady-state capital-labor ratio for this economy is (Round your response to two decimal places.)