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1)closed economy, perfectly elastic labor supply, and linear technology. IF the incremental capital-output ratio is 3, the depreciation rate is 3%, and the gross savings rate is 10%?
(a) Use the Harrod-Domar growth equation to determine the rate of growth-
(b) What would the gross savings rate have to be to achieve 5% growth?
(c) Assuming a perfectly elastic labor supply, state one criticism of this model from an exogenous growth theory viewpoint and criticism of this model from an endogenous growth theory viewpoint.
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