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1. Suppose an economy is initially in a steady state as described by the Solow model with labour augmenting productivity. Show and explain what the
1. Suppose an economy is initially in a steady state as described by the Solow model with labour augmenting productivity. Show and explain what the impact of large improvements in the quality of educational institutions could be using relevant diagrams and formulae. 6 marks. 2. Find the golden rule savings rate and level of capital per worker in a Solow model without technological change. The exogenous parameters take on the following values
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