Answer part (B) 1. Suppose that a country's production function isY = 2VKVANand that the savings rate, s, is equal to 20% and the depreciation rate, 6, is10%. Suppose further that the labor force grows by 1% each year and that therate of technological progress is 6% per year.Part (a): Calculate the values of(i) the steady-state level of capital per effective worker(ii. the steady-state level of output per effective worker(iii) the growth rate of output per effective worker(iv) the growth rate of output per worker(v) the growth rate of outputPart (b): Suppose that the labo force now grows at 5% per year. Calcu-late the changes in the values obtained in part (a). Compare parts (a) and (b)and comment.

Given: Y=2KAN s=20% Depreciation=10% r=1% g=6% New r=5%

Answered: Answer part (B)

Business

Economics

Answer part (B)

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter20: Economic Growth

Section: Chapter Questions

Problem 20RQ: For a high-income economy like the United States, what aggregate production function elements are...

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