Policy change affect growth according to solow model

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Reference no: EM13897112

For each of the following policy changes answer the following question: Does this policy change affect growth according to the Solow model (in terms of levels, growth rates or both)? If yes - which variable(s) does it affect? If no, does it affect growth anyway? Why or why not?

a) The government introduces a consumption tax

b) The government sells education bonds and the proceeds are invested in markedly better public schools

c) A trade agreement is passed which lowers dozens of tariffs

d) Subsidies to Orms conducting base research are reduced

e) It is announced that there will be a unprecedented crack-down on corruption at all levels of government

f) The capital gains tax is lowered

g) The central bank increases the money supply

h) The ceiling for maximum contributions to 401(k) accounts is raised

i) A previously enforced one-child-policy is scrapped

j) Weather patterns change leading to much less severe winters which leave roads virtually un- harmed (not a policy change .... or is it...?)

Reference no: EM13897112

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