For the following 3 questions, use the Solow model with technology A where

whereand

For all questionsuse the following parameter values

Share of income paid to capital, = 0.5

Rate of savings, s =0.2

Rate of population growth, n =0.01

Rate of capital depreciation, = 0.04

You will be given the value ofg, the growth rate of A, in the question.

Enter your answer rounded to 2 decimal places, as in 3.24. (Your answer may be a whole number, in which case you could for example enter 3.00 or just 3.)

Assume the value of g = .03. The economy currently has=2. How fast isgrowing at this time? Enter your answer as % rounded to two decimals (without percent sign).

The correct answer is: 3.07