Question:
Consider the Solow growth model in which output (Y) is determined by the production function Yt = 0.2Kt + 0.8Lt, where K and L denote capital and labour used in the production process, and t depicts time. The depreciation is given by δKt, where δ = 0.2. Saving is given by sYt, where s = 0.5. Assume that the population does not grow with time. The steady state capital per unit of labour is ______ (in integer).
Consider the Solow growth model in which output (Y) is determined by the production function Yt = 0.2Kt + 0.8Lt, where K and L denote capital and labour used in the production process, and t depicts time. The depreciation is given by δKt, where δ = 0.2. Saving is given by sYt, where s = 0.5. Assume that the population does not grow with time. The steady state capital per unit of labour is ______ (in integer).
Updated On: Jul 18, 2024
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Correct Answer: 4
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The correct answer is 4.
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