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Now calculate the new levels of investment and the real interest rate as a result of this policy change. Depict your answers both before and

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Now calculate the new levels of investment and the real interest rate as a result of this policy change. Depict your answers both before and after the change in a well-labeled loanable funds diagram. [Use \"A\" for your original equilibrium point and \"B\" for your new equilibrium point after the policy change] Does equilibrium investment in the country change by more or less than the change in government spending? 1Why? Explain by calculating the policy change's effect on private savings. 1What prediction would economists make for the behavior of potential GDP growth as a result of the policy change in (b)? Explain. From \"The Industrial Revolution: Past and Future\" by Robert E. Lucas, Jr. [available under \"Readings\" f Unit II on the course website): How does Professor Lucas explain the importance of the demographic transition in reconciling the differences in growth rates of GDP per capita among his ve regions in Figure 3? Are Malthusian theories still relevant in today's world? 1Why or why not? Explain the characteristics of rapidly growing economies as outlined by Professor Lucas in this reading. Can you relate these characteristics to the sources of productivity growth equation used in section? 1|Which economic theory of growth best fits the pre industrial revolution world? 1|illr"'hich best ts the post industrial revolution world? What theory may explain the transition from one theory to the next

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