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Business, 16.03.2020 17:06 anthonyfr10004

Country A and country B both have the production function Y = F(K, L) = K1/2L1/2. Assume that neither country experiences population growth or technological progress and that 5 percent of capital depreciates each year. Assume further that country A saves 10 percent of output each year and country B saves 20 percent of output each year. Using your answer from part (b) and the steady-state condition that investment equals depreciation, find the steady-state level of capital per worker for each country. Then find the steady-state levels of income per worker and consumption per worker. Country A: k* = y* = c* = Country B: k* = y* = c* =

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Country A and country B both have the production function Y = F(K, L) = K1/2L1/2. Assume that neithe...

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