Question: Two countries are described by the Solow model, with Cobb- Douglas production functions. In Country 1 the rate of investment is 10%, and in Country

Two countries are described by the Solow model, with Cobb- Douglas production functions. In Country 1 the rate of investment is 10%, and in Country 2 it is 20%. The two countries have the same levels of productivity, A, and the same rate of depreciation, d=0, and the same growth rate of population n. Assuming that the value of is 1/3, what is the ratio of steadystate output per worker in Country 1 to steady-state output per worker in Country 2? What would the ratio be if the value of were 1/2?

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