Suppose y = k¹/²,total factor productivity is constant and equal to 1,s = 0.40,and d = 0.10.When the economy reaches the steady state,consumption per worker is ________.

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Quizplus · Accepted Answer

In the steady state, consumption per worker is given by c = (1 - s) * y. Here, y = k¹/² and in the steady state, s * y = d * k. Solving for k gives k = (s/d)². Substituting s = 0.40 and d = 0.10, we find k = 16. Therefore, y = 16¹/² = 4. Thus, c = (1 - 0.40) * 4 = 2.40.

Suppose Y = K¹/²,total Factor Productivity Is Constant and Equal