Suppose that the production function is given by Y=K1/21/2 a. Derive the steady state levels of...

 

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Suppose that the production function is given by Y=K1/21/2 a. Derive the steady state levels of capital per worker and output per worker in terms of the saving rate, s, and the depreciation rate, õ. b. Suppose ð = 0.05 and s = 0.2. Find out the steady state output per worker. c. Suppose o = 0.05 but s increases to 0.5. Find out the steady state output per worker and compare your result with your answer in part b. Explain the intuition behind your results. Suppose that the production function is given by Y=K1/21/2 a. Derive the steady state levels of capital per worker and output per worker in terms of the saving rate, s, and the depreciation rate, õ. b. Suppose ð = 0.05 and s = 0.2. Find out the steady state output per worker. c. Suppose o = 0.05 but s increases to 0.5. Find out the steady state output per worker and compare your result with your answer in part b. Explain the intuition behind your results.

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