I need help this questions and please provide justification 8. The golden rule capital stock is the steady-state capital stock whereA. f'(k)= dB. sf'(k)= dkC. sf'(k)= dD. f'(k) 1E. sf (k)= dk

Answered: 8. The golden rule capital stock is the…

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter14: Investment, The Capital Market, And The Wealth Of Nations

Section: Chapter Questions

Problem 2CQ

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I need help this questions and please provide justification

8. The golden rule capital stock is the steady-state capital stock where
A. f'(k)= d
B. sf'(k)= dk
C. sf'(k)= d
D. f'(k) 1
E. sf (k)= dk

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The MPK =δ level, where the marginal product of capital matches the depreciation rate, is known as the Golden Rule capital stock. When the economy starts out with more capital than the Golden Rule level, achieving the Golden Rule level results in increased spending across all periods in time.

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