Question
President Trump signed a proclamation suspending entry into the US of certain immigrants. Impact of immigration ban on real wages in the short-run was an
President Trump signed a proclamation suspending entry into the US of certain immigrants. Impact of immigration ban on real wages in the short-run was an increase in real wages. In the short run, the ban caused the real rental rate of capital to increase. In the long run, there is a 1% decrease in the growth rate of the population so real wages were unchanged as technological progress only impacts real wages on a balanced growth path.
In the long-run ( the US is on a balanced growth path) explain the impact of President Trump's Immigration ban on the real rental rate of capital in the US and what is the change in the real rental rate of capital in the long run(if at all). The savings rate is 20%, the share of payments of national income to capital is 1/3 and the growth rate in population is 1%.
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