1. Consider the g theory of investment we covered in the first two lectures. Suppose m(K) = aK+ b, where 2 0, and the adjustment cost of capital is C(I) = cI?. Describe the effects of each of the following changes on the K = 0 and g = 0 loci, on K and g at the time of the change, and on their behavior over time, with the help of the phase diagram. In each case, assume that K and 4 are initially at their long-run equilibrium values. (a) At time 0, the government announces a uniform profit tax which reduces prof its to w(K) = aK + b', where b'