(Solved): A country is described by the Solow model, with a production function of …

A country is described by the Solow model, with a production function of y = k^(1/2). Suppose that k (capital intensity) is equal to 16. The fraction of output invested in 50%. The depreciation rate is 10% and the population growth is zero. Is the country at its steady-state level of output per worker, above the steady state, or below the steady state? Show how you reached your conclusion.

Solution:

Solution:

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