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- Derive the Equation of Motion for Solow growth Model and discuss the break-even level of investment.Carefully discuss why consumption behaviour, as a microeconomic component, isimportant to the Solow Growth Model. (Include graphs and equations where necessary)What are the draw backs of Solow growth model
- discuss simplest assumption of Solow model?What is the graphical representation for solow growth model consumption function C = C0 + C1 (Y-T) ? Also can you provide an explanation for the graph. Thank you.Growth rates in the Solow model (II): Suppose an economy begins in steadystate and is characterized by the following parameter values: s = 0.2, d = 0.1,A = 1, L = 100. Apply your answer to exercise 9 to calculate the growth ofper capita GDP in the period immediately after each of the changes listedbelow. (Hint: Since the economy begins in steady state, its growth rate isinitially zero and Kt = K∗.)(a) Te investment rate doubles.(b) Te productivity level rises by 10%.(c) An earthquake destroys 75% of the capital stock.(d) A more generous immigration policy leads the population to double.
- For a high-income economy like Australia, what aggregate production functionelements are most important in bringing about growth in GDP per capita? What about a middle-income country such as India? A low-income country such as Afghanistan?What is linear stages of growth model in ecomonics? Explain by your own understanding.To determine potential GDP we use a model with which two components (select all that apply)? An aggregate production function. An aggregate labor market. □ A Solow growth model. □ A classical economic growth model.
- Explain why consumption per worker grows at a different rate than in Solow model II (with population growth)As an economic and accounting analyst, which of the two should a government pay more attention for domestic and economic growth? increase importation of goods and services increase export of goods and services Choose the best answer and explain.Find the level of income of given Harrod growth model and Warrnted growth rate from the following equations ! = 2.03(Y;Y,) S = 0.25Y, Y, = 7000 %3!
