In the mid 1300's, the Black Death (aka Great Plague) swept through Europe, killing approximately 30% - 60% of the population in Europe. The plague was indiscriminate, killing farmers, peasants, blacksmiths, scientists, engineers, mathematicians, and royalty alike. Using a Solow Model, illustrate and explain the effects of the Black Death on Europe. Assume Europe was in steady-state prior to the outbreak.

Question 1: (45 points) Costa Rica Bound Assume that one year ago the U.S. economy was in SR and LR equilibrium with Un = 5.3 of 2.5%. Over the last year, business confidence has been dropping, house prices are been rising. The graph below shows oil prices for the past year. WTI (NYMEX) Price End of day Commodity Futures Price Quotes for Crude Oil WTI (NYMEX) 78.00 CLF19: 52.61 76.00 74.00 72.00 70.00 68.00 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.61 50.00 48.00 j Vol: 1,569,101 Open Interest: 2,056,566