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Definition of Exchange rate
The exchange rate is stated as the price of one unit of currency in terms of other currency. If one euro costs 1.5 USD then 1 USD costs 1/1.5 = 0.667 euro. If exchange rate is stated in terms of euro (for instance, 1.5 USD/euro) then euro is known as the base currency or the unit currency.
Derive the conditions for steady state in the Solow model. What are its implications? In what respects is the golden rule different from the steady state?
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