Question
Let us assume that the beautiful nation of Ramsville has a production function of the form: YY= KK .4LL.6 , savings rate of 35 %
Let us assume that the beautiful nation of Ramsville has a production function of the form: YY= KK .4LL.6 , savings rate of 35 % and depreciation rate of 10%. Let us further assume that Ramsville has a technological advancement rate of 3% and that its population grows at 3%. Hint: don't forget to adjust the production function to a per capita form.
Suppose that Buffaloville is next door to Ramsville . Assume that both the nations are identical in all aspects except that Buffaloville's s=45% Now, let us further assume that both the nations start at k= 3.
How does c differ in the two countries in one period?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started