Homework Answers
22> b less, increases
If the capital labor ratio is lesser than the steady state level, the investment is much lower than what it should be. Also, capital ratio should rise in future.
23> a investment=depriciation
Since Capital is there, the investment should add up as much capital to cover the loss due to depriciation, this will be the steady state.
24> b savings+ depriciation
Since labor forece is not present, the change can only come from savings and depriciation of capital.
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