k Time y Time Y L Time Y Time to t1 C. At time t1, this economy raises the savings level to s' where s'> 10%. On the plot above, diagram of the variables as the economy evolves through time. a. Given...

Extracted text: k Time y Time Y L Time Y Time to t1 C. At time t1, this economy raises the savings level to s' where s'> 10%. On the plot above, diagram of the variables as the economy evolves through time.


Extracted text: a. Given a per capita production function ofy= k^0.5, a savings rate of 10%, a depreciation rate of 2%, a technological growth rate of 1%, and a population growth of 3%, what is this economy's steady-state level of output per capita. In a sentence, describe over time what is happening to this economy's level of RGDP when the economy is in a steady state. b. Imagine that the economy described in part a of this problem begins time (tO) with 1 unit of capital per effective worker. Assume that investment demand rises at the same rate as real GDP. Further, assume that by time t1 this economy has achieved the steady-state level of capital. On the left-hand side of the plots below, diagram the movement of the requested variables between time to and time t1.