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(d) Now suppose that the floods lower Korea's capital stock by 75%. Plot the Solow diagram for Korea. (Hint: it should look like Figure 5.2,

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(d) Now suppose that the floods lower Korea's capital stock by 75%. Plot the Solow diagram for Korea. (Hint: it should look like Figure 5.2, but with actual numbers of the y and x axes.) (e) Solve for the level of output in Korea in each of the first ten years following the flood. (Hint: make a table somewhat like Table 5.1 and plot the level of output over time, much like Figure 5.12.) What are the implied growth rates for output in each of the first ten years? How do these compare to the implied growth rates for the other countries, which are assumed to be in steady state? Should the MOEF worry about lower growth in Korea? What is the economic intuition for why growth rates are predicted to be different in Korea than in the other countries

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