Using the law of motion of capital, a cobb-douglas production function, and the equation for GDP in a closed economy with no government, compute the level of consumption in year-5. You are given: a=1/3 8=.1 s=,15

Using the law of motion of capital, a cobb-douglas production function, and the equation for GDP in a closed economy with no government, compute the level of consumption in year-5. You are given: a=1/3 8=.1 s=,15

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

Using the law of motion of capital, a cobb-douglas production
function, and the equation for GDP in a closed economy with
no government, compute the level of consumption in year-5.
You are given:
1
3
8=.1
s=.15
Ko=1
Lt=1
Y = K{L}-a
Yt=C++It
C;=(1-s)Yt
It = sYt
%3D

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Step 1: Define Cobb-douglas production function

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