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Calculate the investment, savings, output, income, population, growth.

Suppose we are told the following information about the closed economy of Lower Canuckistan. There is no technological change or improvement. Capital depreciates at 8% per year and the population is growing at 2% per year. This economy saves 20% of all income.

Please keep all calculations to at least two decimal places.

Is this economy presently in steady state? Explain why/why not? Over time what will happen to capital and output per worker? Explain. Over time, in the very long-run, immediately following the initial LR equilibrium what happens to the level of aggregate output? (i.e. Does it go up, down or stay the same?) Explain.

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