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Consider two countries: Country A and Country B. Suppose GDP per capita is currently growing at 4 percent in Country A but only growing at
Consider two countries: Country A and Country B. Suppose GDP per capita is currently growing at 4 percent in Country A but only growing at 1 percent in Country B. Use the Solow model to provide a potential explanation why GDP per capita is currently growing faster in Country A than in Country B. According to the Solow model, what will happen to the growth rate in GDP per capita in the two countries in the future?
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