Question

In the Solow growth model, suppose that the marginal product of capital increases for each quantity of the capital input, given the labor input.
(a) Show the effects of this on the aggregate production function.
(b) Using a diagram, determine the effects on the quantity of capital per worker and on output per worker in the steady state.
(c) Explain your results.



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  • CreatedDecember 05, 2014
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