Country a Has a Capital-Labor Ratio That Is Initially Twice

question 25

Essay

Country A has a capital-labor ratio that is initially twice as big as that of country B,but neither is yet in a steady state.Both countries have the same production function,f(k)= 6k1/2.Country A has a 10% saving rate,10% population growth rate,and 5% depreciation rate,while country B has a 20% saving rate,10% population growth rate,and 20% depreciation rate.
(a)Calculate the steady-state capital-labor ratio for each country.Does the initial capital-labor ratio affect your results?
(b)Calculate output per worker and consumption per worker for each country.Which country has the highest output per worker? The highest consumption per worker?

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Definitions:

Criterion Validity

Criterion validity refers to the extent to which a measure is related to an outcome.

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The process of creating tools or systems for specific purposes, often involving considerations of functionality, user experience, and efficiency.

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