Neco 2022 Economics Question 31
Practice objective / multiple choice question 31 from the 2022 Neco Economics examination.
An economy is described by the Solow growth model with a Cobb‑Douglas production function \(Y = K^{0.5}(AL)^{0.5}\). The savings rate is 20%, the depreciation rate is 5% per year, the population growth rate is 2% per year and the rate of labour‑augmenting technological progress is 1% per year. The government wishes to raise the steady‑state level of output per worker by 10% without changing any other parameter. Assuming the capital‑output ratio remains unchanged, what should be the new savings rate (as a percentage) required to achieve this target?
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About This Question
This is Neco 2022 Economics Question 31. It is one of the objective questions from the 2022 Neco Economics examination.
Difficulty level: Hard .
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