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8} Consider the basic Solow growth model with no population growth and no technological progress. Assume, as before, that aggregate production function is CobbDouglas, Y
8} Consider the basic Solow growth model with no population growth and no technological progress. Assume, as before, that aggregate production function is CobbDouglas, Y = Kalil} G at\". o <: denote the private saving rate by s and depreciation assume that d :5 suppose there is a government in model. aggregate demand side of economy therefore described following equation r="c+r+o." o where g spending. every period spending constant fraction output some exogenous parameter satises addition consumption net derive which describes evolution capital per worker over tijne. h characterize steady state this economy. nd values investment as functions model parameters only. c consider permanent increase example starts to spend more how does ahect you. can use graphical analysis answver question or you just argue terms analytical expressions derived part>
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