Consider an economy that begins in a steady-state. Then an asteroid destroys two third of the capital stock. Using Solow model, draw a graph to explain how the economy behaves over time. Draw another graph indicating how output progresses over time, and demonstrate what happens to the level and growth rate of per capita GDP. By how much does the output decline when the capital stock falls by two third? Please include a description of what's happening on the graphs.

Q4. Illustrate the Steady-State of the Solow-Swan model and show the effect of an increase in the savings rate on the Steady-State. PLease expain detail with the diagram.

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Consider an economy for which y = Ake with the parameter values as listed: A=19, s=0.4, n=0.3, d=0.2 ,0 =0.5. Compute the steady state value for k. As a first step, graphically depict an economy in steady state. Be sure to label the axes, all lines, and steady state for k, y, c, and i . Suppose that productivity A decreases. Include on your graph the impact this will have on the economy. Be sure the direction of change is clear. The graph should depict the original and new steady states and clearly indicate which is which.

Assume a country is in steady state. Explain what will happen id a disaster hit the country and destroyed 40% of its capital stock, but nobody is killed. Draw the diagram of solow model.

Long run economic growth a) An economy is in its steady-state. According to the Solow model, what will happen to output per worker if the saving rate were to increase? Draw a diagram to illustrate. b) According to the Solow model, an increase in the saving rate is not always desirable. Why not? c) In the world economy, we see a great disparity of income per person. Yet the Solow model predicts conditional convergence – that poor countries will grow faster than rich countries and eventually converge to the same level of income per person as the rich countries. According to the Solow model, what conditions must be met for convergence to occur?

Use a Solow Model diagram to show what will happen to the country's standard of living in a steady-state if this country has a permanent increase in the rate of immigration. (Use the words and graphics to analyze the change of a long-run level of output and capital) Please do fast ASAP fast

Describe the various components of fluctuations in economic activity over time. Because economic activity fluctuates, how is long-term growth possible?

4. On January 12th 2010 a devastating earthquake with a magnitude of 7.3 struck Haiti. As a result, about 40% of the capital stock of Haiti was destroyed. Assume the economy was at its steady state before the earthquake hit. Use the Solow Diagram to illustrate how the economy was impacted. Draw a graph showing how output evolves over time and explain what happens to the level and growth rate of per capita GDP.

Problem 4 a) Prof Andrew described steady states as "horrible places to be." Was this claim absolute or relative? Do countries having steady states that are lower in the capital have worse living qualities? b) Imagine a world where there are "n" countries with different levels of capital, k. They all share the same saving level, birth rate, and the same GDP per capita function. The only thing that differs is their depreciation rate. In this world, how does the distribution of income in the short term and long term look like? Think about the shape it would take.