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Assume a Cobb-Douglas Production Function, Where the Share of Labor

Question 1

Multiple Choice

Assume a Cobb-Douglas production function, where the share of labor (N) and capital (K) is each 1/2 and A = 1.If the growth rate of labor is n = 0.06, the rate of depreciation is d = 0.04, and the savings rate is s = 0.2, what is the value of the steady-state capital-labor ratio?


A) 0) 5
B) 1
C) 2
D) 4
E) 5

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