Given the information below AO = 10; KO=40; L0 = 80; alpha=0.33; s = 0.5; delta...

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Given the information below AO = 10; KO=40; L0 = 80; alpha=0.33; s = 0.5; delta = 0.05 a) calculate the next period's capital and GDP level, i.e. K1 = ? and Y1 = ? b) assuming 10 percent TFP growth and 5 percent labor force growth from year 1 to year 2, calculate K2 and Y2. Note: This questions needs to be solved by hand, not by Excel. So show your work! Given the information below AO = 10; KO=40; L0 = 80; alpha=0.33; s = 0.5; delta = 0.05 a) calculate the next period's capital and GDP level, i.e. K1 = ? and Y1 = ? b) assuming 10 percent TFP growth and 5 percent labor force growth from year 1 to year 2, calculate K2 and Y2. Note: This questions needs to be solved by hand, not by Excel. So show your work!

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To solve this problem we will use the CobbDouglas production function which relates output Y to capi... View the full answer