(solution) Consider two countries that are otherwise identical (have the

(solution) Consider two countries that are otherwise identical (have the

Consider two countries that are otherwise identical (have the same saving rates and depreciation rates), but the population of Country Large is 100 million, while the population of Country Small is 10 million.

a. Compare the steady state levels of output per worker if the population growth rates are the same in the two countries. Explain and illustrate graphically using the Solow model with no technological change.

b. If the population grows at a faster rate in Country Small than in Country Large, which country will have the faster rate of growth of output per worker in the steady state?