Economy in a stable state that complies with the golden rule

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Task 1:

The economy is in a steady-state, there is no technological progress. The marginal product of capital is 1. The population growth rate is 5%, the depreciation rate is 10%. Is the economy in a stable state that complies with the Golden Rule? Illustrate the situation.

Task 2:

It is known that 40% of the income is derived from the use of capital, and 60% from labour. The growth rate of capital is 6%, the growth rate of labour is negative and equal to -2%. No technological progress. How will the release change?

Reference no: EM132471481

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