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Consider Two Countries That Are Otherwise Identical (Have the Same

question 6

Essay

Consider two countries that are otherwise identical (have the same saving rates and depreciation rates), but the population of Country Large is 100 million, while the population of Country Small is 10 million. Use the Solow model with no technological change to compare the steady-state levels of output per worker if:
a. the population growth rates are the same in the two countries.
b. the population growth rate is higher in Country Large.


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