1. The savings rate for a national economy is comparatively stable. The economy faces a sharp uptick in energy prices and at the same time imposes stringent restrictions on environmental pollution. The combined impact of energy and environmental factors renders a large portion of the existing stock of manufacturing equipment and structures economically obsolescent. What is the impact on the economy according to Equation 11.3?

2. A country experiences a sharp demographic rise in the divorce rate and single-parent households. Using the framework of Equations 11.1 and 11.3, what is likely to happen to total national production, total per capita income, and total income per household?

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22 AT + +(1-0) (11.3) A K