I need help with the questions and please prove justification. **Question 5:**In the Solow growth model, defining \( \bar{s} \) as the savings rate, \( Y_t \) as output, and \( C_t \) as consumption, investment, \( I_t \), is given by:A. \( I_t = (1 - \bar{s}) \)B. \( I_t = \bar{s}Y_t \)C. \( I_t = (1 - \bar{s})C_t \)D. \( I_t = \bar{s}Y_t - C_t \)E. \( I_t = (1 - \bar{s})Y_t \)---**Question 6:**Consider the Solow growth model where the production function is Cobb-Douglas with \( \bar{A} \) as the total factor productivity and \( \alpha \) as the capital share. The steady-state capital stock per worker is:A. \( (\bar{s} \bar{A} / \bar{d})^{\frac{\alpha}{1-\alpha}} \)B. \( (\bar{s} \bar{A} / \bar{d})^{\frac{1}{1+\alpha}} \)C. \( (\bar{s} \bar{A} / \bar{d})^{\frac{1}{1-\alpha}} \)D. \( (\bar{s} \bar{A} / \bar{d})^{1-\alpha} \)E. \( (\bar{s} \bar{A} / \bar{d})^{\alpha} \)---**Question 7:**In the textbook Solow growth model, an increase in the savings rate ______ the steady-state capital stock per worker, ______ steady-state output per worker, and ______ steady-state consumption per worker.A. Reduces; Reduces; ReducesB. Raises; Raises; RaisesC. Raises; Reduces; ReducesD. Reduces; Raises; RaisesE. Raises; Raises; Can raise or lower

ANSWER: (5). Solution- In solow model, s¯ = saving rate Yt = Output Ct = consumption…

Answered: . In the Solow growth model, defining s…

. In the Solow growth model, defining s as the savings rate, Y, as output, and Ct as consumption, invest- ment, It, is given by:

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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