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Suppose we're modeling an economy using the Solow model. It begins in steady state. By what proportion does y? (the post-change steady-state per capita GDP) change in response to the following changes? Show your work/reasoning (a solution for y? will be a useful starting point).
(a) The investment rate doubles?
(b) The depreciation rate falls by 15%
(c) Productivity rises by 15%
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Suppose that the quantity theory of money holds & the velocity of money are constant at 5. Output is fixed at its full employment value of 10,000 & the price level is 2. a) Ver
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