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Question: 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.
Has the researcher clearly explained and justified the chosen methodology? What research methods has the researcher adopted to conduct the research project?
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