Question: Consider a Solow growth model with the following production function: PF: YA. = 16 (KA.)0.5 where Y/. is per capita output, KA. is capital per

Consider a Solow growth model with the following production function:

PF: YA. = 16 (KA.)0.5

where Y/. is per capita output, KA. is capital per capita, the savings rate is 0.20, the population growth rate is 0.02 and the depreciation rate is 0.06.

Calculate the steady state level of K/ and Y/L.

Calculate the steady state level of K/ and Y/L. (2 marks)

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