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2. Use the Solow growth model of chapter 5 and assume that = 1/3. In other words the production function is given by = 1/32/3.
2. Use the Solow growth model of chapter 5 and assume that = 1/3. In other words the production function is given by = 1/32/3. Due to a horrible pandemic, falls by 50%. a. Show graphically how this affects and . (10 points) b. Using the formulas for the steady state levels of capital and output, compare the capital stock, , and output, , after the drop in the population . (10 points) c. Graph the level of output (y-axis) over time (x-axis) before and after the change in (ideally in a "ratio scale"). (10 points)
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