Question
Country A and B have some production functions given by: Y = F (K, L) = K^(1/2) *L^(1/2) Where L is the labor, which is
Country A and B have some production functions given by:
Y = F (K, L) = K^(1/2) *L^(1/2)
Where L is the labor, which is assumed to exogenously growing at the rate n while depreciation is given by S while is the saving rate
a.)Does this production function exhibit constant returns to scale? Explain
b.)What is the production per effective units of labor?
c.)Derive the dynamic or equation of motion in the Solow Model
d.)Using a diagram state, the dynamics of the economy when there is an increase in the saving rate or labor force
e.)Derive the expression for the steady state level of capital stock and output.
f.)Derive an expression for the growth in capital per worker and output per worker
g.)Derive an expression for Golden Rule level of capital per worker and output per worker
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