Print Calculator alc Question 6 of 15 Map Sapling Learning Consider a Solow grow

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Print Calculator alc Question 6 of 15 Map Sapling Learning Consider a Solow growth model with the following formulation = 0.0175 Investment 0.192,K Y = 0.384 Depreciation Adjust the lne labeled "depreciation" and the function labeled "investment" to be consistent with the model above 4.5 3.5 What is the steady-state level of capital? Number 2.5 1.5 What is the steady-state output? Number 0.5 0 2040 60 80 100 120 140 160 180 200 Capital K Previous Give Up & View Solution O Check Answer Next Exit Hint

Explanation / Answer

At steady state level investment just cover depreciation, that is

sf(k) = dK

0.192(k)0.5 = 0.0175K

K = 120.372 or approx 120

Steady state level capital = 120

Thus steady state level output = 0.384(k)0.5 = 0.384(120)0.5 = 4.213

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