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2. Capital accumulation and growth (40 points). As a consultant to a major consumer goods producer you are charged with surveying Syria as a potential

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2. Capital accumulation and growth (40 points). As a consultant to a major consumer goods producer you are charged with surveying Syria as a potential future market. You are asked to forecast economic growth in a postwar Syria. Technical reports on the country reveal that the share of income paid to capital is 33 percent (i.e., a = 1/3), capital depreciation is 15 percent per year, and the saving rate is 25 percent per year. The following equations describe the steady state capital stock and output in the Solow model. L K55: (5:31\" xL YES : AKng-a a. Use the Solow Growth Model to compute the steady state capital stock for Syria when the available labor, L, is 100. Assume that there is no population growth or technological growth and that A = 1. Also assume that the entire population works, that is, L is the entire population. (5 points)

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