Question
Economics Question on National Income Accounting
For the per capita production function y = K0.5; what is the level of savings rate at which the consumption per capita is maximised at steady state? Assume depreciation (δ) = 0.1 and no population growth.
A
10%
B
20%
C
40%
D
50%
Answer
50%
Explanation
Solution
The correct option is(D): 50%