Question: Question 2 According to the Solow model, how would each of the following affect consumption per effective worker in the long run? Show your solution

Question 2

According to the Solow model, how would each of the following affect consumption per effective worker in the long run? Show your solution graphically and comment on the outcome in words.

(a) A permanent increase in the rate of immigration. (b) A permanent increase in the saving rate.

(c) A permanent increase in taxation for start-ups.

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