Question below in black and my answer is in red. My question to you is; Am I correct about the advantages
and disadvantages and also what must happen to the savings rate in order to increase steady state consumption?
1. Suppose the saving rate is greater than the golden rule saving rate (sG). First, explain what must happen to the saving rate in order to increase steady state consumption. Second, what are the advantages and disadvantages of this policy to increase steady state consumption?
If the savings rate is greater than the golden rule savings rate of 50%, in order to increase steady state consumption, the saving rate must decrease down to 50%.
The advantage to the decrease in savings would be an increase in consumption per worker while the disadvantages would be a decrease in capital per worker and output per worker.