(i) A country's national saving is 20% of its national income and it needs $5 worth of capital for producing $1 worth of goods and services on the average. The economic planners want the country to grow at the rate of 10% per annum and expect that there will be no shortage of labor in the growth process. Is this growth rate consistent with what you have learned from the Harrod- Domar Model? If not, how can the planners make a plan to achieve a 10% growth rate?

(ii) In the Lewis model, how are the real wage rates determined in the modern sector?