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Calculating steady state values.

Consider an economy described by the following production function Y=F(L,K)=L 0.8 K 0.2

A)Assuming no population growth or technological progress, find the steady state capital stock per worker, output per worker, consumption per worker also investment per worker given which the rate of saving is 20% also depreciation rate is 10% . describe how which the values computed above are steady state values. (Limit Computed values to 10 decimals points)

B)describe how would the steady state outcomes above change if this economy increased its saving rate to 30% (Re Compute the steady state values)

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M916629

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