Question: Given the production function, y = kAl-- assume that the economy is in equilibrium in year zero with g1=0.02 s=0.2 82 -0.02 - 1/3 8

Given the production function, y = kAl-- assume

Given the production function, y = kAl-- assume that the economy is in equilibrium in year zero with g1=0.02 s=0.2 82 -0.02 - 1/3 8 0.12 4, = $100 a. Beginning in year zero, the growth rate of labor input doubles to four percent. Output per worker in year zero is unaffected, but the faster growth of labor input effects the level of output per worker in each subsequent year. Calculate the level of output per worker in year two. (Round your answer to the nearest thousandth] (10 points) Suppose that the faster growth of labor input is accompanied by faster growth of technology (both changes occurring in year zero and affecting output per worker beginning in year one). 2. Calculate the level of capital per worker in year ten, such that the level of output per worker is the same, despite these changes, as the level that would have occurred in the original equilibrium (if no growth rates had changed). [Assume that the economy with changed growth rates is in equilibrium in year ten, and the growth rate of technology is three percent.)

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