Given the following information, answer the questions:

- Output per worker is 100.
- The savings rate is 20%.
- The depreciation rate is 4%.

Question 1
Calculate output per worker if capital per worker is 40,000.

Question 2
Calculate investment per worker if capital per worker is 40,000.
Hint: Use your answer to the previous question.

Question 3
Calculate the amount of depreciation per worker if capital per worker is 40,000.

Question 4
Calculate net investment if capital per worker is 40,000.

Question 5
Is capital per worker growing, decreasing, or staying the same if capital per worker is 40,000?

Question 6
Calculate capital per worker.

Question 7
Calculate net investment if capital per worker is 360,000.

The answers based on the given information:

1. Output per worker (Y/L) is given as 100. Capital per worker (K/L) is given as 40,000.

2. Investment per worker (I/L) can be calculated using the savings rate (s). I/L = s * (Y/L). Since the savings rate is 20% (0.20), I/L = 0.20 * 100 = 20.

3. Depreciation per worker can be calculated using the depreciation rate (d) and capital per worker (K/L). Depreciation per worker = d * (K/L). Since the depreciation rate is 4% (0.04), Depreciation per worker = 0.04 * 40,000 = 1,600.

4. Net investment per worker can be calculated by subtracting depreciation per worker from investment per worker. Net investment per worker = (I/L) - Depreciation per worker = 20 - 1,600 = -1,580.

5. Since the net investment per worker is negative, capital per worker is decreasing.

7. If capital per worker is 360,000, net investment can be calculated by multiplying the savings rate by the new output per worker (assuming it stays the same) and then subtracting the depreciation. Net investment = (s * (Y/L)) - (d * 360,000) = (0.20 * 100) - (0.04 * 360,000) = 20 - 14,400 = -14,380.

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