Assume that a country's per-worker production isy=k^1/2, whereyis output per worker andkis capital per worker. Assume also that 10 percent of capital depreciates per year (= 0.10)and there is no population growth or technological change.

a.

If the saving rate (s) is 0.4, what are capital per worker, production per worker, and consumption per worker in the steady state?

b.

Solve for steady-state capital per worker, production per worker, and consumption per worker withs= 0.6.

c.

Solve for steady-state capital per worker, production per worker, and consumption per worker withs= 0.8.

d.

Is it possible to save too much? Why?