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Homework answers / question archive / In the Solow growth model, if the steady state capital per worker is greater than its golden rule level, i

In the Solow growth model, if the steady state capital per worker is greater than its golden rule level, i

Economics

In the Solow growth model, if the steady state capital per worker is greater than its golden rule level, i.e., ( K/N > KM/N). Then in order to achieve the golden rule level, the saving rate, s, should (rise/ fall/ not change) immediately. The consumption per worker (C/N) would (rise/ fall/ not change) immediately, and then (increase/ decrease/ does not change) over time. Once the steady state capital per worker (K/N) reaches its golden rule level, the overall output per worker (Y/N) would be permanently Y (higher/ lower/ the same) than (as) the initial steady state.

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