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4. For this question, imagine a hypothetical economy with no technological change. Sup- pose that the capital stock is initially equal to 300 percent of
4. For this question, imagine a hypothetical economy with no technological change. Sup- pose that the capital stock is initially equal to 300 percent of GDP, and the depreciation rate is 10 percent. (In the real world it is impossible to measure either the capital stock or depreciation, but we will ignore that for this assignment.) (a) If, in a given year, 20 percent of income is saved, what is the change in the capital stock? (b) Now suppose the population is growing at 5 percent. In order to keep the ratio of capital per worker constant at its initial value, what would the savings rate have to be
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