Business, 08.11.2019 18:31 lisacarter0804
Consider an economy that is described by the solow growth model with the following production function: y = ak^1/3l^1/3. assume there is no population growth or technological progress. suppose the economy starts in steady state. by what proportion will per capita gdp change in the long run in response to each of the following changes?
(a) the saving rate increases by 50%.
(b) an earthquake destroys 75% of the capital stock.
(c) a more generous immigration policy leads the population to double.
Answers: 3
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Consider an economy that is described by the solow growth model with the following production functi...
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