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THE FOLLOWING QUESTIONS IS ABOUT THE LONG-RUN ECONOMIC GROWTH: a) Consider the following equation of the neoclassical (Solow-Swann) growth model. Ak = sf (k) (6
THE FOLLOWING QUESTIONS IS ABOUT THE LONG-RUN ECONOMIC GROWTH: a) Consider the following equation of the neoclassical (Solow-Swann) growth model. Ak = sf (k) (6 + n)k. Explain in words what you understand by this equation and represent it on a diagram b) Assume that a large portion of the capital stock in a country has been c) destroyed due to a war. Show using diagram, how this country can grow over time and reach the steady state, even in the absence of technological process. In answering this question, assume that the saving rate and population remain constant. Suggest some government policies that would foster economic growth. Justify you're answer on the growth models covered in this course
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