second homework

User Generated

nysana

Economics

Description

Please see the file attached that has to be solved within 6 hours. Please let me know if you have any question

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Explanation & Answer

Here it is.

Question 1

A. An increase in the savings rate does not necessarily result to permanent changes in the
parameters of economic growth. It only shifts the short term balance but in the long run, only
technological advancements can cause real growth in the economy.
B. If depreciation rate increases, the depreciation line shifts upwards until it exceeds investment
rate. As a result, the capital stock start going down, and goes on until capital is on its new
equilibriu...


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