Suppose u.s. and china are two countries

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With the use of the Solow Growth Model, answer the following questions:

Suppose U.S. and China are two countries that only differ in the starting level of K (with everything else being the same - N, saving rate, population growth rate and so on). Will both countries end up at the same steady state of income, consumption and capital-labor ratio? Why?Now suppose that in addition to beginning level of K being different, saving rates of the countries are also different, will both countries end up at the same level of standard of living? Why?

Reference no: EM13860440

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