Question: Both population and the work force grow at the rate of n = 1% per year in a closed economy. Consumption is C = 0.5(1

Both population and the work force grow at the rate of n = 1% per year in a closed economy. Consumption is C = 0.5(1 - t)Y, where t is the tax rate on income and Y is total output. The per-worker production function is y = 8k1/2, where y is output per worker and k is the capital- labor ratio. The depreciation rate of capital is d = 9% per year. Suppose for now that there are no government purchases and the tax rate on income is t = 0. Find expressions for national saving per worker and the steady-state level of investment per worker as functions of the capital-labor ratio,

k. In the steady state, what are the values of the capital-labor ratio, output per worker, consumption per worker, and investment per worker?

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