received or given any unauthorized help on this exam, and that all work is my own." Problem 1 (10 points). Suppose that Buckeyeland is a closed economy with a labor force that grows by two percent every year, and that the economy's output in any year t is given as Y = K.310.7 where Ki is the capital stock and L4 is the size of the labor force in year t. Every year, people in BuckeyeNation save a quarter of their income into investing in new capital, and five percent of the existing capital stock becomes obsolete. (a) Suppose the capital stock per worker in a given year t is kt = K What is the investment per worker from year t? What is the break-even level of investment per worker from year t? Draw a figure representing both of these quantities as a function of kt. What is the change in the capital stock per worker from year t to year t+1? (b) What is the steady-state level of capital per worker? What is the steady-state level of output per worker? (c) Draw a figure representing the output per worker and the break-even investment as functions of the capital per worker What is the Golden Rule level of capital in this economy? What saving rate is required to reach the Golden Rule level? 1