Question: Consider the Solow model economic production function, Y = A * K^a * L^(1-a) Assume the following initial conditions: A = 1.2 a = 0.27

Consider the Solow model economic production function,

Y = A * K^a * L^(1-a)

Assume the following initial conditions:

A = 1.2

a = 0.27

K = 16

L = 112

Additionally, you know that depreciation rate is 11 % and the savings rate is 12 %. Assuming no changes in any of the parameters, besides the change in K over time,

what is the long-run equilibrium level of output?

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