Let us assume that the beautiful nation of Ramsville has a production function of the form: YY= KK .4LL.6 , savings rate of 35 % and depreciation rate of 10%. Let us further assume that Ramsville has a technological advancement rate of 3% and that its population grows at 3%. Hint: dont forget to adjust the production function to a per capita form.

Suppose that Buffaloville is next door to Ramsville . Assume that both the nations are identical in all aspects except that Buffaloville's s=45% Now, let us further assume that both the nations start at k= 3.

How does c differ in the two countries in one period?