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If a country’s aggregate production function is Cobb-Douglas with capital share 0.3, output growth is 3 percent per year, depreciation is 4 percent per year, and the Golden Rule steady-state capital

If a country’s aggregate production function is Cobb-Douglas with capital share 0.3, output
growth is 3 percent per year, depreciation is 4 percent per year, and the Golden Rule steady-state
capital-output ratio is 4.29, to reach the Golden Rule steady state, the saving rate must be:
A. 30 percent.
B. 25 percent.
C. 42.9 percent.
D. 17.5 percent.

Apr 13 2021 View more View Less

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