Calculate the steady state capital stock per worker

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Reference no: EM13234440

Consider the following equation: Y = F(K,L) = A K0.15 L0.85

a. State the per worker production function

b. Given that (A = 4) the savings rate is 0.3, the population grows at 0.01 and the depreciation rate is 0.05. Calculate the steady state capital stock per worker and investment per worker.

c. Calculate the golden rule level of capital for the above economy.

d. Calculate the savings rate that will determine this golden rule capital stock.

Reference no: EM13234440

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