Q6 Basic Solow model I

The following equations characterize equilibrium in the basic Solow growth model:

Y=AK^()L^(1)

C=(1s)Y

Y=C+I

K=IK

Answer the following. Use the following parameter values for this problem:

A=1000

=0.35

=0.12

s=0.15

and assume that the economy initially has K=50,000 units of capital and that the size of the labor force is L=100.

Q6.1

Compute the current output Y of the economy.

Round your answer to at least three decimal places. Do not include commas, dollar signs, or other non-numeric characters in your answer.

Q6.2

Compute current output per worker y=Y/L for the economy.

Round your answer to at least three decimal places. Do not include commas, dollar signs, or other non-numeric characters in your answer.

Q6.3

Compute the amount of capital K that the economy will have next period.

Round your answer to at least three decimal places. Do not include commas, dollar signs, or other non-numeric characters in your answer.

Q6.4

Compute the amount of capital per worker k=K/L that the economy will have next period.

Round your answer to at least three decimal places. Do not include commas, dollar signs, or other non-numeric characters in your answer.

Q6.5

Compute the output Y' that the economy will have next period.

Round your answer to at least three decimal places. Do not include commas, dollar signs, or other non-numeric characters in your answer.

Q6.6

Compute the output y=Y/L that the economy will have next period.

Round your answer to at least three decimal places. Do not include commas, dollar signs, or other non-numeric characters in your answer.

Q6.7

The growth rate of output per worker is:

gy=(yy)/y

Compute the growth rate of output per worker.

Enter as rate, not percent. Round your answer to at least three decimal places. Do not include commas, dollar signs, or other non-numeric characters in your answer.

Q6.8

Compute steady state capital per worker for this economy.

Round your answer to at least three decimal places. Do not include commas, dollar signs, or other non-numeric characters in your answer.