Refer to Problem 1 for data and assume now that the population growth rate increases to 5%.
Question:
Refer to Problem 1 for data and assume now that the population growth rate increases to 5%. Calculate the new steady-state values of the capital-labor ratio and output. Explain your answer graphically, and compare the new values of the capital-labor ratio and output per worker to those obtained in Problem 1.
Data from Problem 1
Use the following table to find the steady-state values of the capital-labor ratio and output per worker (i.e., complete the table) if the per worker production function is yt = 2kt0.3:
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