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4- Explain what happens to the economy according to the Solow model wh.docx

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4. Explain what happens to the economy according to the Solow model when some fundamentals change (Increase/Decrease): Case 1. Saving/Investment rate Case 2 . Depreciation rate Case 3. Capital Case 4. Productivity. Present the results using the following 3 ways: 1. Solow diagram. 2. Dynamics over time graph. 3. In words. Example: Consider an economy in steady state. What happens to the economy according to the Solow model immediately and over time when the saving rate falls? 3. Explain in words what happens to the economy immediately and over time: .

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4. Explain what happens to the economy according to the Solow model when some fundamentals change (Increase/Decrease): Case 1. Saving/Investment rate Case 2 . Depreciation rate Case 3. Capital Case 4. Productivity. Present the results using the following 3 ways: 1. Solow diagram. 2. Dynamics over time graph. 3. In words. Example: Consider an economy in steady state. What happens to the economy according to the Solow model immediately and over time when the saving rate falls? 3. Explain in words what happens to the economy immediately and over time:

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  • 1. 4. Explain what happens to the economy according to the Solow model when some fundamentals change (Increase/Decrease): Case 1. Saving/Investment rate Case 2 . Depreciation rate Case 3. Capital Case 4. Productivity. Present the results using the following 3 ways: 1. Solow diagram. 2. Dynamics over time graph. 3. In words. Example: Consider an economy in steady state. What happens to the economy according to the Solow model immediately and over time when the saving rate falls? 3. Explain in words what happens to the economy immediately and over time: