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Unformatted text preview: b. What is MPK in the initial steady state? c. Suppose that public policy raises the saving rate so that the economy reaches the Golden Rule level of capital. What will MPK be at the Golden Rule steady state? Compare the MPK in (b) to this. Explain. d. What will be the capital-output ratio be at the Golden Rule steady state? e. What must the saving rate be to reach the Golden Rule steady state?...
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- Fall '08