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THE NEOCLASSICAL GROWTH MODEL / TUTORIALOUTLET DOT COM

Question 4 (2 2 2 = 6 marks)<br>In the following questions we are considering the neoclassical growth model.<br>(a) In a diagram illustrate an economy in a steady state. Identify the steady state level of output<br>

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THE NEOCLASSICAL GROWTH MODEL / TUTORIALOUTLET DOT COM

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  1. THE NEOCLASSICAL GROWTH MODEL / TUTORIALOUTLET DOT COM

  2. THE NEOCLASSICAL GROWTH MODEL / TUTORIALOUTLET DOT COM The neoclassical growth model FOR MORE CLASSES VISIT www.tutorialoutlet.com Question 4 (2 + 2 + 2 = 6 marks) In the following questions we are considering the neoclassical growth model. In a diagram illustrate an economy in a steady state. Identify the steady state level of output per capita ( y ) and capital per capita ( k ). Also determine the growth rate in y k , output ( Y ) and capital ( K ) at the steady state as a function of the model parameters; the savings rate ( s ), the population growth rate ( n ) and the depreciationrate( d ). [Instructions: Maximum 100 words. You must enter the word count of your answer.] (word count: ?) (b) Suppose there is an increase in the population rate to n' &gt;n . Illustrate the new steady state equilibrium for output per capita ( y ), capital per capita ( k ) relative to that in(a).

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