Based on the Solow-Swan growth model, show and explain how the saving rate determine the steady state capital per worker. Using a diagram of Solow-Swan growth model, explain why an economy should not always keep the saving rate rising to achieve higher steady state capital per worker.

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In the SolowSwan growth model the saving rate plays a crucial role in determining the steady state capital per worker The model focuses on the longrun growth of an economy by examining the relationshi... View the full answer