- Q 2 The Economy Of A Certain Country Has A Constant Savings Rate S A Fixed Depreciation Rate 0 And A Population Gro 1 (31.11 KiB) Viewed 76 times
Q.2 The economy of a certain country has a constant savings rate (s), a fixed depreciation rate (0) and a population growth rate of n. Further, the country has an aggregate production function as follows: Y,= 2 KN a. Check the returns to scale of the above production function and classify it either as increasing, decreasing or constant. b. Derive the per capita production function for the economy and show that it has diminishing marginal product to per capita capital.