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3. a. Consider a country that is at its steady-state level of capital per worker. Now...

3. a. Consider a country that is at its steady-state level of capital per worker. Now assume that this country receives a gift of foreign aid in the form of capital. What should happen to per-capita output levels and growth in the short-run and long-run as a result of this aid? Use the Solow Model to explain your answer.

b. Based on your answer what can you conclude about the effectiveness of foreign aid in increasing growth among developing countries?

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