Question

The technocrats, the econometricians and the engineers in Solowland have determined that the country's production function is given by: $Y = K^{0.3} L^{0.7}$ The depreciation rate is only one per cent of per capita capital stock (? = 0.01) and the country's population growth is also one per cent per year (n = 1%). There is no technological growth. It is also known that Solowland as a whole saves 18 percent of its income. Is this country saving too much or too little or just right? What should be the \"Golden Rule\" target savings rate? Saving too much: Target savings: 25% Saving too little; Target savings 30% Saving just about right; Target savings: 18%. Savings too little; Target savings: 20%

          The technocrats, the econometricians and the engineers in Solowland have determined that the country's production function is given by:
$Y = K^{0.3} L^{0.7}$
The depreciation rate is only one per cent of per capita capital stock (? = 0.01) and the country's population growth is also one per cent per year (n = 1%). There is no technological growth. It is also known that Solowland as a whole saves 18 percent of its income. Is this country saving too much or too little or just right? What should be the \"Golden Rule\" target savings rate?
Saving too much: Target savings: 25%
Saving too little; Target savings 30%
Saving just about right; Target savings: 18%.
Savings too little; Target savings: 20%

$The technocrats, the econometricians and the engineers in Solowland have determined that the country's production function is given by: Y = K^0.3 L^0.7 The depreciation rate is only one per cent of per capita capital stock (? = 0.01) and the country's population growth is also one per cent per year (n = 1%). There is no technological growth. It is also known that Solowland as a whole saves 18 percent of its income. Is this country saving too much or too little or just right? What should be the \"Golden Rule\" target savings rate? Saving too much: Target savings: 25% Saving too little; Target savings 30% Saving just about right; Target savings: 18%. Savings too little; Target savings: 20%$

Added by Zachary H.

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