how to do the graph!!!Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely. The graph shows the output function, savings function, and depreciation function for an economy. Show what happens whenthe investment rate decreases by half by shifting the appropriate curve or curves in the graph.Output (Y)2019181716151413121110987654321Output functionDepreciation functionSavings function00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20Capital (K)What is the savings rate before the change? Answer totwo decimal places.savings rate: .5unitsIn the long run, what happens to consumption in theeconomy when people are saving less?increasesdecreasesO remains the sameO cannot tell from the graph

The Solow growth model, also known as the Solow-Swan growth model or the neoclassical growth model,…

The graph shows the output function, savings function, and depreciation function for an economy. Show what happens when he investment rate decreases by half by shifting the appropriate curve or curves in the graph.

The graph shows the output function, savings function, and depreciation function for an economy. Show what happens when he investment rate decreases by half by shifting the appropriate curve or curves in the graph.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.5P

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Question

how to do the graph!!!

Note:-

Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.

The graph shows the output function, savings function, and depreciation function for an economy. Show what happens when
the investment rate decreases by half by shifting the appropriate curve or curves in the graph.
Output (Y)
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
Output function
Depreciation function
Savings function
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Capital (K)
What is the savings rate before the change? Answer to
two decimal places.
savings rate: .5
units
In the long run, what happens to consumption in the
economy when people are saving less?
increases
decreases
O remains the same
O cannot tell from the graph

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