Suppose that the rate of depreciation as well as the rate, Ask an Expert

Economics

A countries production function is Y=5K^.5 L^.5

Suppose that the rate of depreciation as well as the rate of saving are each .10. Also assume that there is no technological nor population growth.

A. What is the steady state level of capital per worker?

B. What is the steady state level of output per worker?

C. Assume that the savings rate remains at .10 while the rate of depreciation raises to .20. What now happens to steady state level of capital per worker and output per worker.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M9307080

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