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Achieve minimum-growth target

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Q1. Because of population growth, Ghana's GDP must grow by 3% per year just to avoid a decline in average standards of living. If Ghana has an ICOR of 6.0 and a capital depreciation rate of 0.5%, what saving rate is needed to achieve this minimum-growth target?

Q2. In Kreplakistan, both the labor force and the capital stock are each growing by 4 percent annually. Suppose 65 percent of national income goes to labor. The contribution of TFP to growth is 2 percent per year. In how many years will the Kreplakistani economy double in size in real terms?

Reference no: EM133240983

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