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Suppose China begins in steady state. To keep the model simple, let us assume the sole result of these technology transfer policies is to increase the productivity factor by a large and permanent amount, one time. Answer the following questions:
b. Draw a graph showing what happens to output in China over time. What happens to output per person in China in the long run? For this you will need to know what the output per person expression in the steady-state is.
c. Draw a graph showing what happens to the growth of rate of output in China over time.
d. Discuss in a couple of sentences what your results imply about the effect of technology transfer on economic growth.
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