Problem
An economy has the production function Y = A (K^0.3) (L^0.7) where A = 1 and (L^0.7) = 10. The depreciation rate is 10% and the investment rate is 30% of output.
a. Compute the steady state level of capital.
b. Compute the steady state level of output.
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.