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Describe and graph how each of the following affects the k = 0 and = 0 locus. How does c and k react immediately after
Describe and graph how each of the following affects the k = 0 and = 0 locus. How does c and k
react immediately after the change and what is the new steady-state? Note: k and c will denote per
intensive unit of labor.
a) Permanent rise in productivity growth rate g.
b) Rise in the preference for today's consumption .
c) Proportional downward shift of production function f(k).
d) Decrease in the depreciation rate of capital .
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