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Please answer: Q.6 (10 points) Suppose that the production function of a country satisfies the assumptions in the Growth Model we learn in class. The
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Q.6 (10 points) Suppose that the production function of a country satisfies the assumptions in the Growth Model we learn in class. The population, working age population, labor force participation rate and the number of employed persons remain constant over time. The following table presents the average annual growth rate of the real GDP per capita of the country in two periods of time. Average annual growth rate of the real GDP per capita 1960 - 1985 6% 1986 - 2011 9% (a) Is the data above consistent with the "catch-up prediction"? Explain. Your answer should include the definition of the "catch-up prediction." (b) Propose an explanation of why the country's average annual growth rate of the real GDP per capita in the period 1986-201 1 can be higher than the one in 1960-1985Step by Step Solution
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