Suppose a country produces 4.5 million dollars worth of consumer
goods and total output of $100,000,000 million dollars. Its total
capital stock is worth $10 million dollars and 10% of this
depreciates each year. The population rate is 2%. a) what is the value of next period’s total capital stock
according to the Harrod-Domer model? b) what is the growth rate of total income? c) Suppose the country wants to achieve a per capita growth rate
of 5%. How much do people need to save as a percentage of their
income?