If the production function in a country is Y = K^1/2, the investment rate equals 0.25, and the depreciation rate is 0.05, then the steady-state level of output is equal to:

Name: If the production function in a country is Y = K 1/2 , the investment rate equals 0.25, and the depreciation rate is 0.05, then the steady-state level of output is equal to:
Brand: Quizplus
Rating: 4.9 (56 reviews)

Question

Quizplus · Accepted Answer

The steady-state level of output is equal to 5 units because the investment rate equals the depreciation rate, so the capital stock is constant.

If the Production Function in a Country Is Y =