Suppose for a Solow Model Y=K 2/3 (LE) 1/3 . The population growth rate is n and
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Question:
Suppose for a Solow Model Y=K2/3(LE)1/3. The population growth rate is n and technological progress rate is g. And K is capital, LE is effective worker, L is just worker.
1: Find the growth rates of output, capital, output per effective worker and output per worker in the long run.
2: What is f(k)? Find the Golden rule of capital stock. Show your derivation
3:Suppose the Cobb-Douglas production function:Y = AKaL1-aand a is equal to 2/3.If the labor force increased by 5 percent, what would happen to the measured output of the economy? Does labor productivity defined as Y/Ldefined as output per worker increase, decrease, or stay the same? Does total factor productivity increase, decrease, or stay the same
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