Question: Solve clearly Exercise 2. Simple model for the economy A simple model for the economy is given by I' = 1- KS, S' = 1

Solve clearly

Exercise 2. Simple model for the economy A simple model for the economy is given by I' = 1- KS, S' = 1 - CS - Go; where I represent income, S is the rate of spending, Go denotes constant government spending, and C and K are positive constants. a) Plot possible solution curves when C = 1 and interpret the solutions in economic terms. What happens when C > 1 or C

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