Essay
a.Draw figures showing the relationship in the Solow model between the capital-labour ratio and (1)output per worker and steady-state investment per worker,(2)consumption per worker,and (3)steady-state investment per worker and saving per worker
b.Show what happens to each of your figures in part (a)when each of the following changes occur,and explain what happens to the capital-labour ratio,output per worker,and consumption per worker.
(1)population growth rises
(2)the depreciation rate falls
(3)the saving rate rises
(4)productivity declines
Correct Answer:
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a.See text Figs.6.2 and 6.3.
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