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Suppose an economy begins in steady state and is characterized by the following parameter values: s bar=.2 , d bar=.1, A bar, =1, L bar= 100. Apply your answer to calculate the growth of per capita GDP in the period immediately after each of the changes listed below. (Hint: Since the economy begins in steady state, its growth rate is initially zero and Kt=K*)
A) The investment rate doubles
B) The productivity level rises by 10%
C) An earthquake destroys 75% of capital stock
D) A more generous immigration policy leads population to documents
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