The following tables show data on investment rates and output per worker for three pairs of...

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The following tables show data on investment rates and output per worker for three pairs of countries. For each country pair, calculate the ratio of GDP per worker in steady state that is predicted by the Solow model, assuming that all countries have the same values of "A" (level of productivity) and 5 (rate of depreciation) and that the value of a is 1/3. Then calculate the actual ratio of GDP per worker for each pair of countries. For which pairs of countries does the Solow model do a good job of predicting relative income? For which pairs does the Solow model do a poor job? a. Output per Worker in 2009 Investment Bate Country (Average 1975-2009) Thailand 35.2% $13,279 Bolivia 12.6% $8,202 b. Output per Worker in 2009 Investment Rate Country (Average 1975-2009) Nigeria 6.4% $6,064 Turkey 16.3% $29,699 Output per Worker in 2009 Investment Rate Country (Average 1975-2009) Japan 29.9% $57,929 New Zealand 18.6% $49,837 C. The following tables show data on investment rates and output per worker for three pairs of countries. For each country pair, calculate the ratio of GDP per worker in steady state that is predicted by the Solow model, assuming that all countries have the same values of "A" (level of productivity) and 5 (rate of depreciation) and that the value of a is 1/3. Then calculate the actual ratio of GDP per worker for each pair of countries. For which pairs of countries does the Solow model do a good job of predicting relative income? For which pairs does the Solow model do a poor job? a. Output per Worker in 2009 Investment Bate Country (Average 1975-2009) Thailand 35.2% $13,279 Bolivia 12.6% $8,202 b. Output per Worker in 2009 Investment Rate Country (Average 1975-2009) Nigeria 6.4% $6,064 Turkey 16.3% $29,699 Output per Worker in 2009 Investment Rate Country (Average 1975-2009) Japan 29.9% $57,929 New Zealand 18.6% $49,837 C.

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Since we know productivity A and depreciation ... View the full answer