Exam 11: Saving, Capital Accumulation and Output

Suppose an economy experiences an increase in the saving rate. We know with certainty that this increase in the saving rate will:

At the current steady state capital- labour ratio, assume that the steady state level of per capita consumption, (C/N)*, is less than the golden rule level of steady state per capita consumption. Given this information, we can be certain that:

Suppose the economy is initially in the steady state. An increase in the depreciation rate (6) will cause: