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Question 3 Suppose that the production function is given by Y=KUZLU2 a. Derive the steady state levels of capital per worker and output per worker
Question 3 Suppose that the production function is given by Y=KUZLU2 a. Derive the steady state levels of capital per worker and output per worker in terms of the saving rate, 5, and the depreciation rate, 6. b. Suppose 5 = 0.05 and s = 0.2. Find out the steady state output per worker. c. Suppose 5 = 0.05 but 5 increases to 0.5. Find out the steady state output per worker and compare your result with your answer in part b. Explain the intuition behind your results
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