If the production function is y = 2k1/2 and δ = 0.5, then the Golden Rule level is reached when k is:6.10.4.1.

Question

If the production function is y = 2k1/2 and δ = 0.5, then the Golden Rule level is reached when k is:6.10.4.1.
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Solution 1

The Golden Rule level of capital is the level of capital that maximizes consumption in the steady state. It is found by setting the marginal product of capital (MPK) equal to the depreciation rate (δ).

The production function given is y = 2k^1/2.

First, we need to find the marginal product of ca Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob

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Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
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