Y = K (LE) ¹-α. e economy has a capital share of 1/3, a saving rate of 20 percent, a depreciation rate of percent, a rate of population growth of 2 percent, and a rate of labor-augmenting chnological change of 1 percent. In steady state, capital per effective worker is:

ENGR.ECONOMIC ANALYSIS
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E1

An economy has a Cobb-Douglas production function:
Y = K (LE)¹-α.
The economy has a capital share of 1/3, a saving rate of 20 percent, a depreciation rate of
5 percent, a rate of population growth of 2 percent, and a rate of labor-augmenting
technological change of 1 percent. In steady state, capital per effective worker is:
O
O
4
4
6
O 1
O 1.6
Transcribed Image Text:An economy has a Cobb-Douglas production function: Y = K (LE)¹-α. The economy has a capital share of 1/3, a saving rate of 20 percent, a depreciation rate of 5 percent, a rate of population growth of 2 percent, and a rate of labor-augmenting technological change of 1 percent. In steady state, capital per effective worker is: O O 4 4 6 O 1 O 1.6
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