Graphically illustrate and explain the effects of a decrease in the rate of depreciation (?) on the Solow growth model. In your graph, clearly label all curves and equilibria
What will be an ideal response?
The depreciation line becomes flatter and at the initial K/N depreciation is now less than investment. In this case, K/N and Y/N will rise. If depreciation is less than saving, it is also less than investment. Alternatively, there is excess investment to offset the amount of capital that wears out. So, the capital stock will increase. This will cause an increase in K/N, Y/N, and S/N. As Y/N rises, so will C/N. This is all shown easily with the graph of the model.
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A tariff is a
A product is considered to be nonexcludable if
A) you cannot keep those who did not pay for the item from enjoying its benefits. B) it is jointly owned by all members of a community. C) your consumption of the product reduces the quantity available for others to consume. D) you can keep those who did not pay for the item from enjoying its benefits.
If the price of apples rises from $.50 to $1.50 and quantity demanded falls from 1,000 to 900, we can conclude that the price elasticity for apples is
a. -20. b. inelastic. c. elastic. d. unitary.
The transmission lag is the time between
A) the implementation of a policy and when the impact of the policy is felt. B) the enactment of a policy (getting a policy passed by Congress with the president's approval) and the implementation of the policy (putting a policy into effect). C) realizing a policy is needed and enacting the policy. D) the occurrence of an event and policymakers realizing the event has occurred.