What is the source of long term growth in the model

Reference no: EM132197795

Question: 1. Describe how the steady state capital stock per effective unit of labor (k) depends on the savings rate, depreciation rate, population growth rate, and technological growth rate?

2. If the steady state capital stock per effective unit of labor increases from a change in the savings rate, depreciation rate, population growth rate, how does GDP per capita, consumption per capita, and capital per capita adjust!

3. Assuming population growth is positive, does the capital stock grow faster or slower than the capital stock per capita?

4. Use the Solow dingram to show what happens from a decrease in the depreca-. tion rate to the steady state capital stock per effective unit of labor and steady state output per effective unit of labor. Note that a decline in the population growth rate has the same effects on k* and y.

5. What is the source of long term growth in this model? What parameter determines how fast the GDP per capita grows?

Reference no: EM132197795

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