Econ 114 PS#2

Econ 114 PS#2 - Examples in the graph show that there are...

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Allison Cox # 8698037 Econ 114 1/27/09 PS #2 1. Year 2000: Average savings rate: 16.62377673 Minimum savings rate: -32.40641403 Maximum savings rate: 74.04692078 The variation in the savings rate across countries is highly dispersed meaning there is not distinguishable pattern. The book describes many factors that can contribute to a country’s savings rate like government policies, cultural ideology or basic inability. Such a variation in the data accurately depicts that many factors can explain differences in savings rate. 2. Generally, as shown above one can conclude that the lower the savings rate the lower the GDP per capita. However, it is not a guarantee a lower savings rate creates poverty.
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Unformatted text preview: Examples in the graph show that there are countries with high savings and poverty as well as low savings and wealthy countries. GDP per capita and Savings Rate-40-20 20 40 60 80 10000 20000 30000 40000 50000 GDP per capita Series1 3. The Solow model states that the savings rate of a country is a factor that affects the growth rate of countries implying that a higher savings rate should lead to a higher GDP growth rate. Unfortunately, this graph does not accurately depict this. The data is too dispersed to say this supports the Solow model. GDP Growth Rate and Savings Rate-60-40-20 20 40 60 80 100-0.06-0.04-0.02 0.02 0.04 0.06 0.08 Growth Rate...
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This note was uploaded on 03/01/2009 for the course ECON 114 taught by Professor Cindybenelli during the Winter '08 term at UCSB.

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Econ 114 PS#2 - Examples in the graph show that there are...

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