Consider a country in steady state with the following production 1 function: y = kż and saving rate s=0.3. Assume that i

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Consider A Country In Steady State With The Following Production 1 Function Y Kz And Saving Rate S 0 3 Assume That I 1 (47.28 KiB) Viewed 53 times

Consider a country in steady state with the following production 1 function: y = kż and saving rate s=0.3. Assume that in period 1 the savings rate increases so that s=0.35. Gross investment per capita (i) will O Decline permanently as more income is saved. O Increase and remain at the new higher level. Increase but then decline as the country approaches the steady state. Decline initially as more income is saved but then increase due to higher income per capita y.