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A Solow growth economy with a labour force of 400 workers has a depreciation rate of 5 percent, a savings rate of 10 percent and
A Solow growth economy with a labour force of 400 workers has a depreciation rate of 5 percent, a savings rate of 10 percent and a production function Y = K^1/2*L^1/2.
a. Provide a labelled diagram and supporting calculations to illustrate and quantify the "Golden Rule" equilibrium.
b. What savings rate would be required to support this equilibrium? _______________.
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