What is the capital-output ratio k-y in the economy

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Consider an economy with population growth at rate n = :03, technological growth at rate g = :02, depreciation at rate = :05, and a

savings rate of s = :30. The economy is at steady state.

(a) What is the rate of growth of aggregate income Y in this economy? Show your work.

(b) What is the rate of growth of the aggregate capital stock K in this economy? Show your work.

(c) What is the rate of growth of the capital-labor ratio K/L in this economy? Show your work.

(d) What is the rate of growth of per-capita income Y/L in this economy? Show your work.

(e) What is the capital-output ratio K/Y in this economy? Show your work.

(f) List three policies that can improve the economy's steady state income per capita (y).

Reference no: EM13186677

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