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Q1. There is three parts to this question please explain the short run and long run effects. Suppose a country loses part of its capital
Q1. There is three parts to this question please explain the short run and long run effects. Suppose a country loses part of its capital stock as a result of a natural disaster.
- How would this event affect the level of capital per worker and output per worker immediately after the disaster and in the long run?
- How would the growth rate change during the transition from the short to long run?
- Explain your answer with appropriate diagrams.
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