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When an Economy Reaches a Steady State Other Than the Golden

Question 117

Essay

When an economy reaches a steady state other than the Golden Rule, what actions should the policy makers take to achieve the Golden Rule steady state when:
a. The economy begins with more capital than in the Golden Rule steady state
b. The economy begins with less capital than in the Golden Rule steady state

Correct Answer:

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a. When the economy begins with more cap...

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