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4. Suppose that we are comparing two countries, Venezuela and the Netherlands where the actual GDP per capita in 2012 were $4000 and $40,000 respectively.

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4. Suppose that we are comparing two countries, Venezuela and the Netherlands where the actual GDP per capita in 2012 were $4000 and $40,000 respectively. Assuming that both countries have the same production function, y = kg , the same values of 6 (at 5%) and that the value of a is 1/3. The following table shows data on rates of savings (s), population growth rates (n) and years of schooling in the two countries : Country 5 (%) n (%) Hears of schooling Venezuela 5 4 4 0 10 Netherlands 20 a) Suppose you only have access to the rates of savings and population growth data but do not have access to the data on years of schooling (the last column of the table), use the Solow model to calculate the ratio of the steady state levels of income per capita of Venezuela to the Netherlands

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