The economy of Glovania can be described by the Solow growth model. At the steady state, in Glovania the labour force grows at 3 percent per year, labour-augmenting technology increases at 2 percent per year, the saving rate is 15 percent per year, and the rate of capital depreciation is 10 percent per year. Choosing from among the following variables-output per effective worker, output per worker, total output, labour force, capital per worker, and capital per effective worker-which variables will be growing at a:
a.2 percent rate?
b.3 percent rate?
c.5 percent rate?
d.0 percent rate?

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The Answer of The economy of Glovania can be described by the Solow growth model. At the steady state, in Glovania the labour force grows at 3 percent per year, labour-augmenting technology increases at 2 percent per year, the saving rate is 15 percent per year, and the rate of capital depreciation is 10 percent per year. Choosing from among the following variables-output per effective worker, output per worker, total output, labour force, capital per worker, and capital per effective worker-which variables will be growing at a:
a.2 percent rate?
b.3 percent rate?
c.5 percent rate?
d.0 percent rate?

The Economy of Glovania Can Be Described by the Solow