Debating between two policies for raising output per worker

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Reference no: EM131198620

a) What is the numerical value of the saving rate maximizes steady state output per effective worker? Clearly explain why households would have a problem with this saving rate.

b) In the steady state, what are the growth rates of Y /(EL), Y /L, and Y ?

c) Policymakers are debating between two policies for raising output per worker:

A. Permanently increase the saving rate s.

B. Permanently increase the growth rate of labor efficiency g.

Which of the two policies – A or B – will have a greater effect on output per worker in the long-run? Explain.

Please show me how to do it. really appreciated

Reference no: EM131198620

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