Exercise 3.2 (The Golden Rule II). Consider an economy in which in any year t, output per capita, denoted yt, is produced by the technology yt = ke", where kt denotes capital per person. Assume that the capital stock depreci- ates at the rate of 10 percent per year. 1. Calculate the saving rate associated with the Golden Rule, OGR. In addition, calculate the steady-state levels of capital per person, output per person, consumption per person, and the interest rate under the Golden Rule, denoted KGR, yGR, CGR, rGR, respectively. 2. Suppose that people discount future consumption. Specifically, assume that the subjective discount factor, denoted , is 0.95. Calculate the optimal steady-state saving rate, denoted o. Calculate also the steady-state levels of capital per person, output per person, consump- 118 January 16, 2023, S. Schmitt-Grohe & M. Uribe tion per person, and the interest rate under the optimal steady-state saving rate, denoted KOPT, yOPT, COPT, and POPT, respectively. 3. Provide intuition for your findings