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Computing for capturing the effect of the higher savings rate.

An economy has the per worker production function

yt = 3Ki0.5

Here yt is out per worker and kt is the capital-labour ratio. The depreciation rate is 0.1.

Savings is given by

St = 0.3Yt

Where St is total national savings and Yt is total output.

Discuss the institutes for your findings about the effect of the higher savings rate.

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M921333

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