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c) (5 points) Assuming a country is in steady state - set ko = k* for some benchmark parameter- 'Or a or z, but we
c) (5 points) Assuming a country is in steady state - set ko = k* for some benchmark parameter- 'Or a or z, but we assumed that o is common across countries and we'd expect technology to adapt/spill over in the long run. 2 ization (s", 2") - what happens to consumption over time if technology suddenly increases from 2" to 2" > 2? What happens to consumption if the savings rate suddenly increases from s' to Sgr > 5", where sor is the golden rule savings rate? d) (4 points) Assuming technology is common across countries, can the basic Solow model (without technological advancement) explain temporary differences in cross-country output/consumption per capita? How about permanent ones? e) (2 points) Assuming technology is common across countries, can the full Solow model (with technological advancement) explain temporary differences in cross-country output/consumption per capita? How about permanent ones
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