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Growth rates in the Solow model: Suppose an economy begins in steady state and is characterized by the following parameter values: δ = 0.2, d = 0.1, A = 1, L = 100. Apply your answer to exercise 9 to calculate the growth of per capita GDP. (Hint: Since the economy begins in steady state, its growth rate is initially zero and K = K*.) a) The investment rate doubles. (b) The productivity level rises by 10%.
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