The production function is Y=40K 1/4 *EL 3/4 The rate of depreciation (?) is 10%

ID: 1095052 • Letter: T

Question

The production function is Y=40K1/4 *EL3/4

The rate of depreciation (?) is 10%

The rate of population growth (?) is 2%

The rate of technological growth (g) is 3%

The savings rate (s) is 30%

a) Derive the equation for output per effective worker y=Y/(EL) = f(k), k equals the amount of capital per effective worker.

b) Calculate the steady state levels for each of the following:

i) Capital per effective worker

ii) Output per effective worker

iii) Savings and investment per effective worker

iv) Consumption per effective worker

c) Find the steady state growth rates of capital per worker, output per worker, saving and investment per worker, and consumption per worker.

d) Find the steady-state growth rates of total capital, total output, total savings and investment, and total consumption.

e) Derive the MPk.

f) Calculate the Golden Rule level of capital per effective worker and output per effective worker at the Golden Rule steady state.

g) Calculate the Golden Rule savings rate, savings per effective worker, and consumption per effective worker.

pls wait?

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