Some countries have higher investment rates than others. Here, Davisville saves 20 percent of its output. Megalopolis saves 30 percent of its output.

1. What is the steady state capital stock in each city?
2. What is the steady state output in each city?

Y Y=-VK 30 Depreciation = 0.04 x K 20 Investment = 0.3 x VK 9 Investment = 0.2 x VK 5 300 500 K