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Consider the following numerical example using the Solon.r growth model. Suppose that: F(K,N)=ZK25N35 and d = 0.04, s = 0.3, n = 0.035, and z
Consider the following numerical example using the Solon.r growth model. Suppose that: F(K,N)=ZK25N35 and d = 0.04, s = 0.3, n = 0.035, and z =1.T5. The unit period is one year. 1. Find the steady state per-capita capital stock (k'), output per capita (y*), and consumption per capita (c*) [14 pts] 2. Suppose that the economy is at its steady state in year 0. Let 2 increase from 1 to 1.1 at the end of year 0. Determine the aggregate quanties of the capital stock, consumption, and output for years 1, 2 and 3 (Le, K, C and Y). Summarize your results using a table. Population N=1000 at time i=0 - [16 pts] Good Luck
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