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CL8 ECO 3203 - If necessary round your answers to 2 decimal...

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Classwork #8 Consider the Solow growth model: a. Explain the difference between required investment and actual investment. b. Suppose the capital stock (K 1 ) has a value of 2000, the labor force (L 1 ) has a value of 100, the depreciation rate is 5%, and the population growth rate is 2%. For each given level of actual investment (I), fill in the values in the table.
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Unformatted text preview: If necessary, round your answers to 2 decimal places. I = 200 I = 140 I = 80 K 2 = K 2 = K 2 = L 2 = L 2 = L 2 = K 2 /L 2 = K 2 /L 2 = K 2 /L 2 = c. Are any of these levels of investment a steady state? Explain....
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