The Economy of Alpha Can Be Described by the Solow

question 24

Essay

The economy of Alpha can be described by the Solow growth model. The following are some characteristics of the Alpha economy:
$$\begin{array} { l l } \text { saving rate } ( \boldsymbol { s } ) & .20 \\\text { depreciation rate } ( \bar { \delta } ) & .12 \\\text { steady-state capital per worker } ( \boldsymbol { k } ) & 4 \\\text { population growth rate } ( \boldsymbol { n } ) & .02 \\\text { steady-state output per worker } & 20,000\end{array}$$
saving rate (s) .20 depreciation rate (δ) .12 steady-state capital per worker (k) 4 population growth rate (n) .02 steady-state output per worker 20,000
a. What is the steady-state growth rate of output per worker in Alpha?
b. What is the steady-state growth rate of total output in Alpha?
c. What is the level of steady-state consumption per worker in Alpha?
d. What is the steady-state level of investment per worker in Alpha?

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