Consider the Solow model with no technological progress. Assume that depreciation equals 0.20, population growth is 0.10, and that the capital-output ratio K/Y equals 0.7. Finally, assume that the savings rate is 30% (i.e. s=0.3). Then, the economy's steady state capital per worker is below the Golden Rule level the economy's steady state capital per worker is exactly at the Golden Rule O level it is impossible to know whether the economy is at the Golden Rule level without more information the economy's steady state capital per worker is above the Golden Rule level

Consider the Solow model with no technological progress. Assume that depreciation equals 0.20, population growth is 0.10, and that the capital-output ratio K/Y equals 0.7. Finally, assume that the savings rate is 30% (i.e. s=0.3). Then, the economy's steady state capital per worker is below the Golden Rule level the economy's steady state capital per worker is exactly at the Golden Rule O level it is impossible to know whether the economy is at the Golden Rule level without more information the economy's steady state capital per worker is above the Golden Rule level

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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