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EEIvPS3-Pdf @ QQ m 2v n Page 1 of 2 VIEW Inspector Zoom Share Highlight Rotate Markup Search 2. Poverty trap Consider a SolowSwan economy
EEIvPS3-Pdf @ QQ m 2v n" Page 1 of 2 VIEW Inspector Zoom Share Highlight Rotate Markup Search 2. Poverty trap Consider a SolowSwan economy with a Cobb-Douglas production function, Y = AK\"L1_\" with A = 10 and a = 0.5. The depreciation rate is 6 = 0.09 and the rate of population growth is n = .01. (a) Write down the fundamental equation of SolowSwan Imagine that the savings rate is s = 0.20 for economies with capital per person k 1000. (b) Plot the basic functions ofthe SolowSwan model, that is, plot the savings function (that is, sf (A, k) ) and the depreciation function (6 + n)k as functions of capital. (c) What is the steady state capital stock per capita, k', for economies with k 1000? (e) Consider an economy in the k
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