# DSE 2013, Q59 series 1 Classic List Threaded 3 messages Open this post in threaded view
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## DSE 2013, Q59 series 1

 The next FIVE questions are based on the following information: Consider an economy where aggregate output is produced by using two factors: capital (K) and labour (L). Aggregate production technology is given by the following production function: Yt=αKt+βLt, whereα,β>0. At every point of time both factors are fully employed; each worker is paid a wage rate β and each unit of capital is paid a rental price α. A constant proportion s of total output is saved and invested in every period - which augments the capital stock in the next period (no depreciation of capital). Labour force grows at a constant rate n. Answer of Q58 The dynamic equation for capital accumulation per worker is given by (b) dk/dt =sαkt +sβ−nkt Q59. Let α=1/2;β=12;s=1/4;n=1/2. The corresponding steady state value of capital per worker is given by: a. 8 b. 36 c. 4^(1/11) d. There does not exist any well defined steady state value Do we have to integrate the expression obtained in 58?