Assume that a country's per-worker production is y = k^1/2,where y is output per worker and k is capital per worker.Assume also that 10 percent of capital depreciates per year (= 0.10).a.If the saving rate (s)is 0.4,what are capital per worker,production per worker,and consumption per worker in the steady state? (Hint: Use sy = $\delta$ k and y = k^1/2 to get an equation in s, $\delta$ ,k,and k^1/2,and then solve for k.)
b.Solve for steady-state capital per worker,production per worker,and consumption per worker with s = 0.6.c.Solve for steady-state capital per worker,production per worker,and consumption per worker with s = 0.8.d.Is it possible to save too much? Why?

Question

Assume that a country's per-worker production is y = k^1/2,where y is output per worker and k is capital per worker.Assume also that 10 percent of capital depreciates per year (= 0.10).a.If the saving rate (s)is 0.4,what are capital per worker,production per worker,and consumption per worker in the steady state? (Hint: Use sy =

\delta

k and y = k^1/2 to get an equation in s,

\delta

,k,and k^1/2,and then solve for k.)
b.Solve for steady-state capital per worker,production per worker,and consumption per worker with s = 0.6.c.Solve for steady-state capital per worker,production per worker,and consumption per worker with s = 0.8.d.Is it possible to save too much? Why?

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The Answer of Assume that a country's per-worker production is y = k^1/2,where y is output per worker and k is capital per worker.Assume also that 10 percent of capital depreciates per year (= 0.10).a.If the saving rate (s)is 0.4,what are capital per worker,production per worker,and consumption per worker in the steady state? (Hint: Use sy = $\delta$k and y = k^1/2 to get an equation in s,$\delta$,k,and k^1/2,and then solve for k.) b.Solve for steady-state capital per worker,production per worker,and consumption per worker with s = 0.6.c.Solve for steady-state capital per worker,production per worker,and consumption per worker with s = 0.8.d.Is it possible to save too much? Why?

Assume That a Country's Per-Worker Production Is Y = K1/2,where δ\deltaδ

Assume That a Country's Per-Worker Production Is Y = K^1/2,where $\delta$