Question: The variable is capital per worker per unit of worker efficiency, or capital per worker modified to reflect the difference in efficiency among workers. Consider

The variable is capital per worker per unit of worker efficiency, or capital per worker modified to reflect the difference in efficiency among workers.

Consider two countries, A and B, with labor efficiencies EA = 1 and EB = 2, respectively.

(a) If the size of the labor force is the same in each country and is the same in each country, which country will have a larger aggregate capital K in steady state?

(b) Given your answer to question 2a above, briefly explain why provide a better measure of the capital per worker needed in an economy.

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