Question 4 4.1 Assuming that, due to the Covid 19 pandemic, people's marginal propensity to save increases in Australia, discuss its effects on the level of output using both the Keynesian model and the Solow-Swan model. 4.2 Suppose that the economy of New South Wales was initially in a steady state before a major bushfire that destroyed some of the country's capital stock. Determine the long-run effects of this on the quantity of capital per worker and on output per worker. Explain, using appropriate diagrams.

Question 4 4.1 Assuming that, due to the Covid 19 pandemic, people's marginal propensity to save increases in Australia, discuss its effects on the level of output using both the Keynesian model and the Solow-Swan model. 4.2 Suppose that the economy of New South Wales was initially in a steady state before a major bushfire that destroyed some of the country's capital stock. Determine the long-run effects of this on the quantity of capital per worker and on output per worker. Explain, using appropriate diagrams.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter14: Macroeconomic Policy: Tradeoffs, Expectations, Credibility, And Sources Of Business Cycles

Section: Chapter Questions

Problem 18E

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