2. Let us introduce government consumption into the standard Ramsey model without technological progress. The government consumes G > 0 (per capita) which is nanced by lump-sum taxes. Thus, the resource constraint for this economy is Ct=k?+(16H)ktkg+lG. The other settings are the same as those in the standard model described in class. (3) Find the conditions of the steady state for perucapita consumption and capital. Compare with the case under G = 0. (b) Suppose that the economy is initially at the steady state with G = 0. One ne day, the government unexpectedly raises its expenditure. G > 0, and keep it permanently. Explain the dynamics of the economy triggered by this policy shock. (c) What if the increase in G is temporary? (The shock is unanticipated but the timing when G returns to zero is known.)