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Y=K+AN 

capital depreciates at rate δ
savings is a constant proportion of 's' of income, assume δ>s 

1. what is the steady state level of capital per effective worker?
2. if A grows at rate Ga, and N grows at rate Gn, what is the steady state level of capital per effective worker?
3. what are the steady-state growth rates in terms of (Ga + Gn) of: capital per worker, output per worker, and capital?
4. when A and N keep growing, what happens to steady state level of output per effective worker? steady state level of output if δ increases? use graph to explain 

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91267293

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