7.Multiple Answer: The household saving rate in Sweden increased from about 4.9 percent in 1995 to 17 percent in 2020. According to SGM1, in Sweden’s new steady state

A. consumption per worker will be lower

B. the marginal product of capital will be lower

C. the marginal product of capital will remain unchanged

D. consumption per worker will be higher

E. the population growth rate will increase

F. the level of capital per worker will be higher

G. the level of output per worker will be higher

H. investment per worker will be lower

I. the level of capital per worker will be lower

J. the depreciation rate will decrease

K. investment per worker will be higher

L. consumption per worker may be higher or lower, depending on whether the new steady state is closer to or further from the golden rule level of capital per worker

M. the marginal product of capital will be higher

N. the level of output per worker will be lower

Sweden's new steady state, consumption per worker is expected to be lower, the marginal product of capital will be lower, the level of capital per worker will be higher, the level of output per worker will be higher, investment per worker will be higher, and the depreciation rate may decrease.

The household saving rate in Sweden increased from about 4.9 percent in 1995 to 17 percent in 2020. According to SGM1, in Sweden's new steady state, several factors will be affected:

1. Consumption per worker: It is expected to be lower in the new steady state. This means that individuals will save more and spend less of their income.

2. The marginal product of capital: It will be lower in the new steady state. This refers to the additional output that can be generated by using an additional unit of capital. As the saving rate increases, the capital stock grows, and the marginal product of capital decreases.

3. Population growth rate: It will not increase. The household saving rate does not directly impact population growth.

4. The level of capital per worker: It will be higher in the new steady state. With a higher saving rate, there will be more investment, leading to an increase in the capital stock per worker.

5. The level of output per worker: It will be higher in the new steady state. As the capital stock per worker increases, the productivity and output per worker also increase.

6. Investment per worker: It will be higher in the new steady state. With a higher saving rate, more funds are available for investment.

7. The depreciation rate: It may decrease in the new steady state, indicating a slower decline in the value of capital over time.

8. Consumption per worker: It may be higher or lower, depending on whether the new steady state is closer to or further from the golden rule level of capital per worker. The golden rule level represents the optimal level of capital that maximizes long-term economic growth.

The population growth rate and consumption per worker may vary depending on their proximity to the golden rule level of capital per worker.

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