Byblostan economy has the following facts: 1. k = 1.5 y (the capital stock is about 1.5 times one year's GDP) 2. d k = 0.15 y (about 15% of GDP is used to replace depreciating capital) 3. MPK k = 0.2 y (capital income is about 20% of GDP) a. The administrators in Byblostan want to know how far their economy from the Golden Rule knowing that their real output growth rate is 4%. b. Discuss only two policies that the government in Byblostan should adopt which may lead their economy reach the Golden rule in the long run. "Devoting a larger share of national output to investment would help restore rapid production growth and rising living standards" Do you agree with this claim? Explain please do not provide an answer already on chegg Q&A

Byblostan economy has the following facts: 1. k = 1.5 y (the capital stock is about 1.5 times one year's GDP) 2. d k = 0.15 y (about 15% of GDP is used to replace depreciating capital) 3. MPK k = 0.2 y (capital income is about 20% of GDP) a. The administrators in Byblostan want to know how far their economy from the Golden Rule knowing that their real output growth rate is 4%. b. Discuss only two policies that the government in Byblostan should adopt which may lead their economy reach the Golden rule in the long run. "Devoting a larger share of national output to investment would help restore rapid production growth and rising living standards" Do you agree with this claim? Explain please do not provide an answer already on chegg Q&A

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter20: Economic Growth

Section: Chapter Questions

Problem 9SCQ: Would the following events usually lead to capital deepening? Why or why not? A weak economy in...

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