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(1pt) 5. Given the following graph which area is consumption? Output 10 B Investment 3 D C 10 100 200 300 A (a) Segment A

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(1pt) 5. Given the following graph which area is consumption? Output 10 B Investment 3 D C 10 100 200 300 A (a) Segment A (b) Segment B (c) Segment C (d) Segment D (1pt) 6. Assume an economy consumes 55 percent of its output, and saves the rest. If capital depreciates at 5 percent per year, and output is produced according to Y = v K, what is steady state output in the Solow model? (a) 9 (b) 11 (c) 12 (d) 5 (1 pt) 7. In the above problem, what is the steady state level of capital? (a) 121 (b) 81 (c) 25 (d) 3

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