Determine the effects of a decrease in the population growth rate on the golden rule quantity of capital per worker and on the golden rule savings rate. Explain your results.
Answer to relevant QuestionsCould differences across countries in population growth account for the persistence in income disparity across countries? Use the Solow growth model to address this question and discuss.Reinterpret the endogenous growth model in this chapter as follows. Suppose that there are two groups of people in a country, the low-skilled workers and the high-skilled workers. The low-skilled workers have less human ...Consider the following effects of an increase in taxes for a consumer.(a) The consumer’s taxes increase by ∆t in the current period. How does this affect current consumption, future consumption, and current saving?(b) ...Suppose that a consumer has income y in the current period, income y' in the future period, and faces proportional taxes on consumption in the current and future periods. There are no lump-sum taxes. That is, if consumption ...Use the social security model developed in this chapter to answer this question. Suppose that a government pay-as-you-go social security system has been in place for a long time, providing a social security payment to each ...
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