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» Economic Growth 2 »
The Solow Model 2 – Comparative Statics
» Practice Questions
1. Consider a basic Solow Model where the production function is represented by Y=√K. Further suppose that savings is represented by s=.3√K. Suppose that s changes to s=.1√K. Graphically, this means that the savings curve
rotates toward the y-axis
2.Consider a Solow Model where Y= F(A,K,eL)= A√K. A(n) _____________ in technology, A, will shift the output curve up.
increase or decrease
3. Consider a Solow Model where Y=AK^α L^(1-α). This is a special type of function known as a ______________ production function.
4. Consider a simple Solow Model. Increasing the depreciation rate of capital (δ) has the __________________ effect as increasing population growth (n) on the depreciation curve.