Fixed amount of final output period forever war reparations

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Assuming that the economy begins from a static equilibrium, consider how the economy responds to the following shocks. Please plot the responses within the phase diagram, and use separate graphs to show the trajectories of k and c over time.

What if the nation loses a war and the planner has to pay a fixed amount of final output a period forever as war reparations?

Reference no: EM131001842

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