Question

HOMEWORK ASSISTANCE Let: Let δ = .20. Let s = .25 in year 0, increasing to...

HOMEWORK ASSISTANCE

Let:

К К+1 N N N KN

Let δ = .20.

Let s = .25 in year 0, increasing to .35 in year 1 and remaining at .35 thereafter.

a) Calculate K/N in year 0.

b) Calculate the growth of K/N, Y/N, and C/N from year 1 to year 3.

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Answer #1

k can be written ask s. K = Sik 2ok 25k 21:25 year I Sok = dk AK = 135x1.56 0.2x1.56 = 6.23 New capital level = 1.56423 = 1.7

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