Country A produces GDP according to the following equation: GDP = 5 K. The country has a savings rate of 16.3% and 8.1% of capital depreciates every year. What is this country's steady state amount of GDP? Round your final answer to two decimal places.

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
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Country A produces GDP according to the following equation: GDP = 5√K. The country has a
savings rate of 16.3% and 8.1% of capital depreciates every year. What is this country's steady
state amount of GDP?
Round your final answer to two decimal places.
Transcribed Image Text:Country A produces GDP according to the following equation: GDP = 5√K. The country has a savings rate of 16.3% and 8.1% of capital depreciates every year. What is this country's steady state amount of GDP? Round your final answer to two decimal places.
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