Macroeconomics 12th Edition by Rudiger Dornbusch ,Stanley Fischer,Richard Startz

Exercise 14

Suppose you add a variable rate of population growth to a two-sector model of growth. ( Hint: Combine Figures 4-2 and 4-3.)
a. What do the production function, investment requirement line, and saving line look like
b. Characterize the set of equilibria for this model. Does output in any of the equilibria have nonzero per capita growth
c. Does the addition of the variable rate of population growth to this model help you explain anything that a simpler two-sector model with a fixed rate of growth, or a one-sector model with variable population growth, cannot