Question: In the Solow model, if y=5 k0.5 , mp s = 0.1, n = 0.1, and d = 0.05, answer the following questions (a).

In the Solow model, if y=5k0.5, mps = 0.1, n = 0.1, and d = 0.05, answer the following questions 

 

(a). What is the value of k at a steady state? (hint: use (n+d)k=mps*y to find out k). 

(b). What are the values of y and c at a steady state?

(c). What is the growth rate of Y at a steady state? 

(d). Please draw a graph for your answers. 

(e). Now consider the case where n=0.05, how does it change your answers in graph (no computation needed)?

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