In the United States, the capital share of GDP isabout 30 percent; the average growth in outputis about 3 percent per year, the depreciation rateis about 4 percent per year; and the capital-out-pút ratio is about 2.5. Suppose that the produc-tion function is Cobb-Douglas, so that the capi-tal share in output is constant, and that theUnited States has been in a steady state. d. What will the capital-output ratio be at theGolden Rule steady state? (Hint: For theCobb-Douglas production function, thecapital-output ratio is related to the marginalproduct of capital.)

Answered: What will the capital-output ratio be…

What will the capital-output ratio be at the Golden Rule steady state? (Hint: For the Cobb-Douglas production function, the capital-output ratio is related to the marginal product of capital.)

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 40P

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