Question

Economic Growth I-End of Chapter Problem Many demographers predict that the United States will have zero population growth in the coming decades, in contrast to the historical average population growth of about 1% per year. a. Use the Solow model to show the effect of this slowdown in population growth graphically To manipulate the diagrams below, click on the endpoint of the curve you wish to pivot and place the endpoint in its proper location. (s+ njk st(k) Investment, Break-Even Investment

Answer 1

A) if population growth slows down , then n falls, so the Slope of line of depreciation falls

It gets flatter, thus , both k & y rises

Investment, Break-Even Investmen Capital per worker ( 8nk

.

B) as growth of total output = n

So as n falls, growth rate of total output falls,

Growth rate of output per worker = 0

So • slowdown in population growth rate will reduce the growth of total output

& no change on growth of output per worker

.

C) total output will be higher

growth rate of output per worker will be unchanged