What saving rate would yield golden-rule level of capital

Assignment Help Business Economics

Reference no: EM13838174

Consider an economy in which production characterized by the neoclassical function Y=K^.5N^.5. Suppose, again, that it has a saving rate of .1, a population growth rate of .02 and a average depreciation rate of .03.

A. Write this production function in per capita form, and find the steady state values of k and y.

B. At the steady-state value of k, is there more or less capital than the golden-rule level?

C. Determine what saving rate would yield the golden-rule level of capital in this model.

D. In the context of the neoclassical growth model, can a country have too much saving?

Reference no: EM13838174

Questions Cloud

Describe the major components of a business model : Describe the major components of a business model. Which component do you identify as the foundation component? Why?

Governments play in making policies regarding ethical issues : What are the ethical questions raised by cloning? Is there any moral difference between applying genetic engineering technologies to humans and applying them to animals and plants? What role should governments play in making policies regarding ethica..

What factors besides income influence work decisions : Would you continue to work after winning a lottery prize of $50,000 a year for life? Would you change schools, jobs, or career objectives? What factors besides income influence work decisions?

Power can be defined as the ability to bring : BUSI/MGMT-Ethical Leadership - Power Power can be defined as the ability to bring about changes in the immediate environment. Power can be exercised by an individual, or a group over other individuals, groups, or organizations.

What saving rate would yield golden-rule level of capital : Consider an economy in which production characterized by the neoclassical function Y=K^.5N^.5. Suppose, again, that it has a saving rate of .1, a population growth rate of .02 and a average depreciation rate of .03. Determine what saving rate would y..

Doing a business project : Doing a business project for my information system management class. Creating parts of a business proposal. Specifically the information systems structure discussion: the business is virtual reality training. Customers being military, students In a c..

What are the capitals and labours shares of income : Consider the following production function. Y=K^5 (AN)^.5 , where both the population and the pool of labor are growing by rate n=.07, the capital stock is deprecciating at a rate of d= .03, and A is normalized to 1. What is the form of this producti..

Plan in healthcare : QI Plan in Healthcare •Identify what is a QI plan and its purpose. •Identify the components of a QI plan. •Identify the appropriate situation to use a QI plan

Increase in the population growth rate : Suppose there is an increase in the population growth rate. Show graphically how this affects the growth rate of both output per capita and total output in the short and the long run.

User Account

All Pages