2. In the Solow growth model, if the steady state capital per worker is greater than its golden rule level, i.e., ( K'/N > Kuna /N). Then in order to achieve the golden rule (rise/ fall/ not level, the saving rate, s, should change) immediately. The consumption per worker (C/N) (rise/ fall/ not change) immediately, (increase/ decrease/ does not change) over time. Once the steady state capital per worker (K/N) reaches its golden rule level, the overall output per worker (Y/N) would be permanently (higher/ lower/ the same) than (as) the initial would and then steady state.

2. In the Solow growth model, if the steady state capital per worker is greater than its golden rule level, i.e., ( K'/N > Kuna /N). Then in order to achieve the golden rule (rise/ fall/ not level, the saving rate, s, should change) immediately. The consumption per worker (C/N) (rise/ fall/ not change) immediately, (increase/ decrease/ does not change) over time. Once the steady state capital per worker (K/N) reaches its golden rule level, the overall output per worker (Y/N) would be permanently (higher/ lower/ the same) than (as) the initial would and then steady state.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Now, in the Solow Model STEADY STATE of ANY ECONOMY that has positive rates of capital depreciation (10%), labor force growth (3%), and rise in worker effectiveness (2%), what is the rate of growth of: a. real GDP (Y) b. real GDP per worker (Y/L) c. real GDP per effective worker (Y/L*E)?
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