The effect on the long run growth rate of income per worker

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Consider an economy where population growth is 0, but technology growth is positive and equal to g. (a) Suppose that the depreciation rate decreases. i. Use graphs to illustrate how the steady state and the golden rule change. ii. What is the effect on the long run growth rate of income per worker? (b) Suppose that the population growth rate decreases. i. Use graphs to illustrate how the steady state and the golden rule change. ii. What is the effect on the long run level of income per effective worker? iii. What is the effect on the long run growth rate of real GDP?

Reference no: EM131083399

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