Question: PLEASE Fill out the table and SHOW ALL CALCULATIONS*** 2. Consider an economy with an aggregate per-worker production function of y=Tk2/3h1/3. The economy has the
PLEASE Fill out the table and SHOW ALL CALCULATIONS***
2. Consider an economy with an aggregate per-worker production function of y=Tk2/3h1/3. The economy has the following characteristics (where all variables are defined as in class): d=0.15T=2s=0.20h=27 a. Solve for this economy's steady-state equilibrium capital and output (see math hints at end, if needed) b. Fill in the table below for the following values of k c. What happens to growth when the capital stock rises above the steady-state equilibrium level? d. What happens to growth when the capital stock is further and further away from the steadystate equilibrium level? e. Suppose the economy is in the steady state described in part (a). Then, two changes occur simultaneously. The savings rate falls to 10% and the level of human capital rises to 64 . Solve for the new level of steady-state capital and output. f. In the same graph, draw the two equilibria (from parts (a) and (e)) and describe how the steady-state changed
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