• If the U.S. production function is Cobb-Douglas with capital share 0.3, output growth is 3 percent per year, depreciation is 4 percent per year, and the Golden  Rule steady-state capital-output ratio is 4.29, to reach the Golden Rule steady state, the saving rate must be?
• a) 17.5 percent
• b) 25 percent
• c) 30 percent
• d) 42.9 percent

How do you work this problem?  Where is the output growth of 3 percent used?  Is the production function y=k ^0.3?

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