Question

3- Growth Model Suppose that the output (Y) in the economy is given by the following...

3- Growth Model

Suppose that the output (Y) in the economy is given by the following aggregate production function.

Yt = Kt +Nt

where the Kt is capital and Nt is population. Furthermore assume that the capital depreciate at the rate of ẟ and That saving constant and proportion s of income you may assume that ẟ>s

1-suppose that the population remains constant . solve for the steady state level of capital per worker

2- now suppose that the population growth at rate n . solve for the steady state level of capital per worker

3-Based on your answer to the part 2) above. solve for the steady state growth rate (in the term of n) of following

  1. Capital per worker

  2. Output per worker

  3. Capital

  4. output

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