Assignment
You are given following capital-labour ratios and their associated output per person:
|
Capital-labour ratio
|
Output per person
|
|
0
|
0
|
|
19,102
|
10,000
|
|
23,518
|
20,000
|
|
24,200
|
22,000
|
|
24,492
|
23,512
|
|
25,416
|
25,000
|
|
26,560
|
29,216
|
|
26,629
|
30,623
|
1. If savings rate is 12.5%, population growth rate is 1% and depreciation rate is 10% calculate the amount of savings per person and steady state investment per person for each of the capital-labour ratio given in the table. Find the values of the steady state output per person and steady state capital-labour ratio.
2. Suppose savings rate decreased to 10% and depreciation rate also decreased to 9.5% but population growth rate remains at 1%. Using these information calculate new amount of savings per person and steady state investment per person for each of the capital-labour ration given in the table. Find the new steady state values of capital-labour ratio and steady state output per person.
3. Calculate the amount of savings per person and steady state investment per person for each capital-labour ratio given in the table if savings rate is 10%, population growth rate is 1% and depreciation rate is 10%. Find the values of steady state capital-labour ratio and steady state output per person in this case.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.