Consumption per worker is 72, depreciation is 12.5%, and capital per worker is 64. Given the production function y = 20 , show that this economy is in a steady state
If the saving rate should double, what is the new steady-state level of consumption per worker?
The steady-state capital-labor ratio k* = . Plugging the values above into this equation yields s = 0.1. Putting the given value of k into the production function yields y = 80, so the given value of consumption per worker implies s = 0.1. This is a steady state. (As further confirmation, note that 64 × 0.125 = 8 = saving, so the loss of capital due to depreciation is exactly restored by investment.) If s = 0.2, then k* = 181, so y = 113, and consumption per worker is 113 × 0.8 = 90.
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If it is easy to uncover buy and sell orders above and below current transactions prices, a market is said to
A) be primary. B) lack breadth. C) be deep. D) be resilient.
Holding other factors constant, a decline in incomes of Europeans will result in a ________ curve in the United States, reducing real GDP relative to potential GDP
A) leftward shift of the IS B) rightward shift of the IS C) upward shift of the MP D) downward shift of the MP