What about the disparity in income levels per person

Reference no: EM132200880

Question: 1) China's real per capita GDP has been growing significantly faster than that in the U.S. China's growth rate was about 10% several years ago, compared to about 3% for the U.S.

a) Using the Solow growth model (with no technological progress), is there reason to believe this disparity in growth rates will disappear in time? What about the disparity in income levels per person?

b) How is your conclusion affected if you were told that China has a higher saving rate than the U.S.?

c) What if the saving rates are the same, but China has a higher population growth rate?

Reference no: EM132200880

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