In year 1, a country has saving rates s = 0.1, productivity A = 2 and depreciation rate d = 0.1. In year 2, the same country has s = 0.1, A = 1, d = 0.2. a. Using the endogenous growth model, find the economy's growth rate in year 1. b. What is the state of the economy in year 1? (Use business cycle words) Using the endogenous growth model, find the economy's growth rate in year 2.

In year 1, a country has saving rates s = 0.1, productivity A = 2 and depreciation rate d = 0.1. In year 2, the same country has s = 0.1, A = 1, d = 0.2. a. Using the endogenous growth model, find the economy's growth rate in year 1. b. What is the state of the economy in year 1? (Use business cycle words) Using the endogenous growth model, find the economy's growth rate in year 2.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter20: Economic Growth In The Global Economy

Section: Chapter Questions

Problem 3P

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