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Answer :
The question you asked is related to economic growth theory, specifically in the context of the Solow-Swan model. The 'Golden Rule level of capital per worker' is a concept that comes from this model and involves the optimal level of capital accumulation that maximizes consumption per worker in the long run.
Let's break it down:
Golden Rule Level of Capital: This is the level of capital per worker that maximizes steady-state consumption. It is found by adjusting the level of capital until the marginal product of capital equals the rate of depreciation plus the population growth rate, allowing for maximum sustainable consumption over time.
Savings Rate and Its Impact: The savings rate in an economy determines how much of the economy's total output is invested in new capital rather than consumed. An increase in the savings rate will lead to increased investment, which in turn raises the capital stock.
Effect on Golden Rule Capital: Importantly, changes in the savings rate do not directly affect the Golden Rule level of capital because the Golden Rule is determined by balancing consumption maximization rather than the actual capital stock itself. Instead, it affects the actual level of capital per worker that the economy might reach in the long run.
The correct answer to your multiple-choice question is:
A) The Golden Rule level of capital per worker remains unchanged.
This is because the Golden Rule level is a theoretical benchmark that does not change with variations in the actual savings rate, even though the actual levels of capital and consumption in the economy may adjust due to these variations.
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