1 Economic Growth [20 Points] 1. Consider a Solow economy which is identical to the one we studied in Lecture 2. The production function is Cobb-Douglas, Y = A . If\" . Nl'c'. The saving rate is 3. population growth rate u and depreciation rate 0!. Suppose the economy stays at its steady state. Before Period T, the productivity A is constant. Afterwards, it starts growing at a positive rate. g > D. Does the capital labor ratio grow in the long run? Explain your answer carefully. 2. Considering the following statement. "The economic growth after 1978 in China was driven mainly by investment and capital accumulation." Is it true or false? Explain your answer carefully