Question: Assume that two countries have the same per - worker production function y = k 1 2 , neither has population growth nor technological progress,
Assume that two countries have the same perworker production function neither has population growth nor technological progress, depreciation is percent of capital in both countries, and country A saves percent of output whereas country B saves percent. If country A starts out with a capitallabor ratio of and country B starts out with a capitallabor ratio of in the long run:
both country A and country B will have capitallabor ratios of
both country A and country B will have capitallabor ratios of
country As capitallabor ratio will be whereas country Bs will be
country As capitallabor ratio will be whereas country Bs will be
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
