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1. For the following, assuming that there is no population growth or technological progress. a) What...

1. For the following, assuming that there is no population growth or technological progress.

a) What is the equation that defines the steady-state level of capital per worker?

b) How would you determine the steady state level or output per worker (i.e., real GDP per capita) from (a).

c) Explain, in words, how an economy that starts with too much capita per worker gets to its steady state.

2. Many demographers predict that the United States will have zero annual population growth in the 21st century, in contrast to one percent annual population growth that occurred in the 20th century. Use the Solow Model (without technological advancement) to predict the effect of this slowdown in population growth on the steady state

a) level of output per person

b) economic growth rate

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