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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.
- Winter '08