In the Solow model with technological change, the Golden Rule level of capital is the steady state that maximizes:
A) output per worker.
B) output per effective worker.
C) consumption per worker.
D) consumption per effective worker.

Question

Quizplus · Accepted Answer

The Golden Rule level of capital in the Solow model with technological change maximizes consumption per effective worker, as it balances the rate of saving and investment to ensure the highest possible standard of living in the long run.

In the Solow Model with Technological Change, the Golden Rule