What is the change in capital-labor ratio in initial period

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Reference no: EM13982067

Suppose an economy has the following per-worker production function:

y = f(k) = 2 k1/2

The saving rate is s = .30 = 30%; the depreciation rate is d= .10 =10%.

There is no population growth.

The initial capital-labor ratio is k = 25.

What is the consumption in the initial period? What is the change in the capital-labor ratio in the initial period?

Reference no: EM13982067

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