Answer:
the country is above the steady state
Explanation:
An economy has the per-worker production function y = [tex]k^{1/2}[/tex]
Here,
y is the output per worker and k is the capital-labor ratio
depreciation rate d = 0.5.
Population growth rate is n = 0%
a. At steady state
Δk = 0
sy-k(d+n) = 0
sy = k(d+n)
0.5 ( [tex]k^{1/2}[/tex]) = k (0.05 + 0)
0.5 [tex]k^{0.5}[/tex] = 0.05k
then resolve for k, and obtain k=100. The capital in steady state.
If the k=400, then the output
y = [tex]k^{0.5}[/tex]
=[tex]400^{0.5}[/tex]
=20
Thus, the country is above the steady state
