Question: please help with a, b, and c for countries a and b 1. Assume that there are two countries with the following characteristics. Per capita
1. Assume that there are two countries with the following characteristics. Per capita Output Y=Akah1a A - technology k - per capita physical capital h - per capita human capital a0.6 Country A with $500 per capita income saves 25% of its output and invests on physical capital, and 25% on investing in human capital. Country B with $5000 per capita income saves 25% of its output and invests on physical capital, and 35% on investing in human capital. a. What are the growth rates of the two countries? b. What will be the per capita income levels after 5 years? c. Will there be convergence on the per capita income in the future? 1. Assume that there are two countries with the following characteristics. Per capita Output Y=Akah1a A - technology k - per capita physical capital h - per capita human capital a0.6 Country A with $500 per capita income saves 25% of its output and invests on physical capital, and 25% on investing in human capital. Country B with $5000 per capita income saves 25% of its output and invests on physical capital, and 35% on investing in human capital. a. What are the growth rates of the two countries? b. What will be the per capita income levels after 5 years? c. Will there be convergence on the per capita income in the future
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