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Solow's growth model is a workhorse model of standard macroeconomic theory. The model assumes competitive markets, prots maximizing rms and households who save an exogenous

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Solow's growth model is a workhorse model of standard macroeconomic theory. The model assumes competitive markets, prots maximizing rms and households who save an exogenous and constant fraction 3 of their income. Equations of the Solow model are given below. kg I it + (1 (\"kg1 wt:(1_a)'yt where kt is the stock of capital per worker at the end of period t, y: , ct et it represent GDPr consumption and investment in productive capital, Rt is the interest rate and wt the wage rate. At represents the productivity level in the economy and is considered exogenous, as is the capital share in production a and the households' saving rate 3. A} Given the information provided, list all the endogenous variables of the Solow model. B} Assume thats : 0.25, a : 1/3, 5 : 0.1 and A : 2. Calculate the steady state of the Solow model

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