To determine whether an economy is operating at its Golden Rule level of capital stock, a policymaker must determine the steady-state saving rate that produces the:

Question

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The steady-state level of capital stock that leads to the largest output per worker is the Golden Rule level of capital stock. This is because at the Golden Rule level of capital stock, the marginal product of capital (MPK) is equal to the rate of depreciation, leading to the highest level of output per worker. Therefore, the policymaker must determine the steady-state saving rate that leads to this level of capital stock.

To Determine Whether an Economy Is Operating at Its Golden