Question: Please help with question 2. I am not sure what formula to use to find kt Consider the following Solow Model with a Cobb-Douglas production

Please help with question 2. I am not sure what formula to use to find kt

Please help with question 2. I am not sure what formula to

Consider the following Solow Model with a Cobb-Douglas production function. yt =Aka yt = at + it it =s . yt kt+1 =(1 - 8) kt + i 1. Do the following, using algebra 1. calculate steady state capital (k s) in terms of A, a, 6, s. 2. determine the functional forms of yt, Ct, it as functions of kt. 3. Determine the functional form of the golden rule of capital. 2. Suppose the A is 50, Capital's share of income is 30%, the savings rate is 25%, and the depreciation rate is 10%. Further, assume that the inital level (t = 0) of capital is 10. Calculate kt for periods 1 through 100. 3. Calculate yt, Ct, it for the periods 1 through 100. 4. Graph the time series kt, yt, Ct, it for the periods 1 through 100. 5. Is this economy following the golden rule by maximizing steady state consumption per worker? If not, should it save more or less? Please include this written portion in the spreadsheet

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