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2. Technology transfer in the Solow model. One explanation for China's rapid economic growth during the past several decades is its expansion of policies that
2. Technology transfer in the Solow model. One explanation for China's rapid economic growth during the past several decades is its expansion of policies that encourage technology transfer. By this we mean policies, such as opening up to international trade and attracting multinational corporations, that encourage the use and adoption in China of new ideas and new technologies. This question asks you to use the Solow model to study this scenario. Suppose China begins in steady state. To keep the problem simple, let's assume the sole result of these technology transfer policies is to increase Total Factor Productivity (A) by a large and permanent amount, one time. Answer the following questions
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