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Suppose the depreciation rate of country A is 5% and the depreciation rate of country B is 7%. The countries are otherwise identical with the
Suppose the depreciation rate of country A is 5% and the depreciation rate of country B is 7%. The countries are otherwise identical with the same Cobb-Douglas production function: Y= K0.31 0.7. State and briefly explain in which country the Golden Rule level of capital per worker is higher and in which country the Golden Rule level of consumption per worker is higher, according to the basic Solow model. Note: Your explanation should refer to the differences (if any) between the countries' depreciation-per-worker (break-even investment) and per-worker production curves. No calculations are required. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph V Arial 10pt v EVA
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