1 2 3 Bennett 3 Exercise 2 (The Golden Rule). Consider an economy in which in any year t, output per capita, denoted Y,, is produced by the technology Y =KO3, where K, denotes capital per person. Assume that the capital stock depreciates at the rate of 10 percent per year. Assume further that population is constant. 1. Calculate the saving rate associated with the Golden Rule, o GR In addition, calculate the steady- state levels of capital per person, output per person, and consumption per person under the Golden Rule, denoted kGR ,y GR, and cCR, respectively. 2. Suppose that people discount future consumption. Specifically, assume that the subjective ount factor, denoted Calculate the steady-state levels of capital per person, output per person, and consumption per person under the optimal steady-state saving rate, denoted kOPT, YOPT, and cOPT, respectively. is 0.96. Çalculate the optimal steady-state saving rate, denoted o0PT 3. Provide intuition for your numerical results. POF 近

Please answer the question with work shown on the attached picture below, thanks!  #6

2:37 PM Mon Apr 17 ents cordings O 3 camino.instructure.com It is impossible to determine which will be favored. Natural Resources Question 3 Which of the following policies would increase the likelihood of economic growth in a country which has recently discovered oil? O Dedicating some of the new revenue to the diversification of labor and capital. Increasing the salaries of government employees in the Energy Department. O Increasing government expenditures in anticipation of large future oil revenues. Dedicating some of the new revenue to intensive training in oil-related jobs. 35% Question 4

YIN CN Next question Suppose that the production function is given by Y- 05VR N 454 where Y is output, Kis capital, and N is the number of workers 4 Suppose that 60 05 With your favonte spreadsheet software, compute steady-state output per worker and steady-state consumption per worker for s 0, 801, a02, s1 Graph the steady-state level of output per worker and the steady-state level of consumption per worker as a function of the saving rate 25 1) Using the multipoint curve drawing tool, drawa curve showing the relationship between YIN and the saving rate. Properly label your curve 15 2) Using the multipoint curve drawing tool, draw a curve showing the relationship between CIN and the saving rate. Properly label your curve 0.5 Although the control ponts for your multpownt curves do not have to be exact try to plot them as accurately as possible 01 02 03 a'4 os o6 07 os 09 Saving rate, At what saving rates are YIN and CIN maximized? After plotting the final point of your multipoint curve…