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An economy described by the SolowSwan model has the following production function: Y K 0.5 t) (a) Solve for the steady-state value of capital-labour ratio
An economy described by the SolowSwan model has the following production function: Y K 0.5 t) (a) Solve for the steady-state value of capital-labour ratio K / L and output per worker Y/ L as functions of 6', d and n. (b) A developed country has a saving rate of 28 percent and a population growth rate of 3 per-cent per year. A less-developed country has a saving rate of 10 percent and a population growth rate of 6 percent per year. In both countries, depreciation is d = 0.04. Find the steady-state value of Y/ L. for each country. (c) What policies might the less-developed country pursue to raise its level of income
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