1. Suppose you add a variable rate of population growth to a two-sector model of growth (Hint: combine figures 4-2 and 4-3 on the textbook)

a) What do the production function, investment requirement line, and saving line look like?

Draw figure and explain.

b) Characterize the set of equilibria for this model. How many equilibria does this model have?

Does output in any of the equilibria have ongoing (i.e., non-zero) per capita growth?

c) Can this model explain poverty trap and/or high-growth countries? How can this economy

escape from the low-level equilibrium?