Question: 2. Consider the Solow model. Suppose the eeononnr is initially in a steady state. Then, the savings rate increases from 31 to 32 > 31.

2. Consider the Solow model. Suppose the eeononnr is initially in

2. Consider the Solow model. Suppose the eeononnr is initially in a steady state. Then, the savings rate increases from 31 to 32 > 31. W hat happens to the capital stock and output. over time? Explain your answers using a Solow diagram. Draw a graph showing the time evolution of output per person (i.e., with time on the x-axis and output per person in the yaxis). Carefully label all relevant points in you graphs

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