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6. Suppose that India and the USA have the same aggregate production function. The two countries are identical except for the fact that output per

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6. Suppose that India and the USA have the same aggregate production function. The two countries are identical except for the fact that output per worker is 10 times higher in the US. Assume that output per worker is given by the Cobb-Douglas function y = 2k\"? , where 2 represents TFP and la the capital per worker. (a) How much bigger would the US capital stock per worker have to be to explain the income difference between the two countries? (b) Use the above production function along with the assumption of per- fect competition in factor markets to generate a prediction for the ratio of interest rates between the two countries

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