A country reports a savings rate

=0.25

, a depreciation rate of physical capital of labor

=0.05

, a labor population growth rate of 0.01 , a technology growth rate = 0.02 , and a physical capital intensity (alpha)

=0.1

. Based on the Solow Model, the savings rate that will maximize consumption per labor is\ a) 0.25 or

25%

\ b) 0.07 or

7.0%

\ c) 0.1 or

10%

\ d) 0.32 or

32%

A country reports a savings rate =0.25, a depreciation rate of physical capital of labor =0.05, a labor population growth rate of 0.01 , a technology growth rate = 0.02 , and a physical capital intensity (alpha) =0.1. Based on the Solow Model, the savings rate that will maximize consumption per labor is a) 0.25 or 25% b) 0.07 or 7.0% c) 0.1 or 10% d) 0.32 or 32%