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The answer to this question is 17.5% but I need an explanation to understand why. Thank you. If the Japanese production function is Cobb-Douglas with

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The answer to this question is 17.5% but I need an explanation to understand why. Thank you.

image text in transcribed
If the Japanese production function is Cobb-Douglas with capital share 0.3, output growth is 3 percent per year, depreciation is 4 percent per year, and the capital-output ratio is 2.5, the saving rate that is consistent with steady-state growth is: O 14 percent. O 20 percent. O 12.5 percent. 17.5 percent

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