Suppose the production is given by Y=0.5*K13(AN)23. Suppose the depreciation rate is 2%, number of workers grows at 2% per year and rate of technological progress is 3% per year. a. If the saving rate is 14% then find the steady state values of capital per uni of effect worker and output per unit of effective worker. a. Suppose the economy is at steady state with saving rate being equal to 14%. Now suppose the savings rate increases to 15% from 14%. VWhat wil be the capital per unit of effective worker one year after the change in savings rate? Show your calculations for both (a) and (b).

Suppose the production is given by Y=0.5*K13(AN)23. Suppose the depreciation rate is 2%, number of workers grows at 2% per year and rate of technological progress is 3% per year. a. If the saving rate is 14% then find the steady state values of capital per uni of effect worker and output per unit of effective worker. a. Suppose the economy is at steady state with saving rate being equal to 14%. Now suppose the savings rate increases to 15% from 14%. VWhat wil be the capital per unit of effective worker one year after the change in savings rate? Show your calculations for both (a) and (b).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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