Describe and graph how each of the following affect the k = 0 and c' == 0 locus. How does c and k react immediately after change and what is the new steady state? Note: k and c will denote per intensive unit of labor (same as k^ and c^ in the lecture slides). a) Permanent fall in productivity growth rate g. b) Rise in the preference for today's consumption \theta. c) Proportional downward shift of production function f(k). d) Increase in the depreciation rate of capital \delta. Dynamics of the Economy Also show the graph please Dynamics of the Economy c=0 č(k) L k=0
Describe and graph how each of the following affect the k = 0 and c' == 0 locus. How does c and k react immediately after change and what is the new steady state? Note: k and c will denote per intensive unit of labor (same as k^ and c^ in the lecture slides). a) Permanent fall in productivity growth rate g. b) Rise in the preference for today's consumption \theta. c) Proportional downward shift of production function f(k). d) Increase in the depreciation rate of capital \delta. Dynamics of the Economy Also show the graph please Dynamics of the Economy c=0 č(k) L k=0
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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