What happens in the steady state to the capital—labor ratio, output per worker, and consumption per worker when each of the following events occur? You should assume that the steady-state capital—labor ratio is below the Golden Rule level
(a) Productivity falls. (b) Population growth falls. (c) The saving rate falls. (d) The depreciation rate falls.
(a) k, y, and c all fall.
(b) k, y, and c all rise.
(c) k, y, and c all fall.
(d) k, y, and c all rise.
Economics
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