Econ problem (Mathematics & Economics Math Problem)

ECON PROBLEM
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Question one: Solow Growth Model Diagram Problems
* Using the Solow Growth Model diagram that incorporates populationgrowth,
* Illustrate what happens to the steady state capital-to-labor ratio when the rate ofpopulation growth decreases from n1 to n2.
With the assumption that economic level stands at n1 and capital stock at k1, the intersection of growth rate line and the saving curve give a steady state. When the population declines from n1 to n2, we expect the growth rate curve to move downwards. What happens to steady-state percapita output?
The savings curve will be cut by capital growth rate and consequently increase per capita saving. This will in turn increase the investment levels of the country and increase in per capita GDP.Population growth moves leftwards making the investment shift to the left. Per capita income decreases as indicated in the diagram.Does this result, in general, help or hurt the ability of the Solow growth model to account for differences in incomes of poorer versus richer countries andwhy?
This assists the Solow growth model to correctly account for the differences between rich and poor countries because the catch up GDP effect is more in developing than developed countries. Consistency is evident.
* Illustrate and state what happens to the maximum consumptionper capita under the golden rule when the rate of population growth decreases from n1 ton2.Does this result, in general, help or hurt the ability of the Solow growth modelto account for differences in living standards of poorer versus richer countries and why?
Lower savings rate causes a long run steady state. Consumption per capita is estimated with the wage per capita since these two are equal. The golden rule of long term saving is in investing all profits and consuming all wages. Profit more than saving and wages are exceeded by consumption. The rate of growth and population growth moves to the left at the golden rule. Consequently, this increases consumption. The marginal product is increased at the golden rule. Prediction assumes some consistency.
* Illustrate what happens to the steady state capital-to-labor ratio when the level oftechnology falls from A1 to A2. What happens to steady-state per capita output? Does this result, in general, help or hurt the ability of the Solow growth modelto account for differences in incomes of poorer versus richer countries and why.
With technology, there seems to be a decrease in the number of effective employees. Thus k decreases. On the other hand, steady state provides that investment I = sf(K). it therefore led by population growth, rate of depreciation and technological process.Sf(k) = δk + nk +gk
* Three strategies for raising long-runconsumption per capita in the U.S.
* Economic stimulation through deregulation. The 1980s saw financial institutions deregulation raise long run consumption per capita.