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8 A Solow growth economy with a labour force of 400 workers.pdf

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8. A Solow growth economy with a labour force of 400 workers has a depreciation rate of 5 percent, a savings rate of 10 percent and a production function Y=K1/2L1/2. a. Provide a labelled diagram and supporting calculations to illustrate and quantify the equilibrium. b. What savings rate would be required to support this equilibrium?.

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8. A Solow growth economy with a labour force of 400 workers has a depreciation rate of 5 percent, a savings rate of 10 percent and a production function Y=K1/2L1/2. a. Provide a labelled diagram and supporting calculations to illustrate and quantify the equilibrium. b. What savings rate would be required to support this equilibrium?

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