Assume that the per-worker production function is y t = 2k t 0.5 . The saving and
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Assume that the per-worker production function is yt = 2kt0.5. The saving and depreciation rates are estimated at 0.2 and 0.04, respectively.
a) Calculate the capital-labor ratio steady state for this economy.
b) Calculate consumption per worker at the steady state.
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