!. neurosis}.r Model [35 points] [all [bl Explain intuitively why g [the growth rate of A] enters the Euler equation negatively [see Homer eqn 2.21]. Explain how a change in g affects the trade off between consuming today vs tomorrow. Compare the effect of a permanent rise in the discount rate In and a permanent rise in the UREA pa'ameter El in the Ramsey model. 1What are the differences and similarities? How do these changesimpact the modied golden-rule capital stocks relative to their golden rule counterparts? Consider the Ramsey model where at some time tn, the government starts subsidizing investment in come at rate 1' [an unanticipated change)| so the real rate of return on savings is now higher and equal to t] = {1 + f'mi]. In order to nance this subsidy, the government uses lump-sum taxes. Use the phase diagram to show the effects on c"' and k\". Is this policy desirable from the point of view of the household? Please explain your