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Tutorial 2 Questions

The document outlines a tutorial for ECO4006F Macroeconomics Honours, focusing on the general Solow model. It includes two questions: the first asks to demonstrate the golden rule of saving, while the second requires a graphical analysis of the effects of an increase in the saving rate on various economic indicators. The tutorial emphasizes visual representation and discussion of the Solow diagram's implications over time.

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3 views1 page

Tutorial 2 Questions

The document outlines a tutorial for ECO4006F Macroeconomics Honours, focusing on the general Solow model. It includes two questions: the first asks to demonstrate the golden rule of saving, while the second requires a graphical analysis of the effects of an increase in the saving rate on various economic indicators. The tutorial emphasizes visual representation and discussion of the Solow diagram's implications over time.

Uploaded by

ning23mabika
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

ECO4006F Macroeconomics Honours

Tutorial 2 (Chapter 5)

The general Solow model

QUESTION 1

Show the golden rule of saving s**=α.

QUESTION 2

Using the Solow diagram, show the effect of an increase in the saving rate s to s’.
Specifically, show the effects that this parameter shift has on capital per effective worker,
capital per worker, the growth rate of output per worker, the natural log of output per
worker and consumption per worker. Show these graphically over time as opposed to
algebraically. Discuss the graphs briefly.

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