Homework3 - Homework #3 ECO362 Summer II 2010 Tuttle...

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ECO362 Summer II 2010 Tuttle Homework #3 is due Wednesday, July 28, 2010 at the start of class. Late homework will not be accepted, no exceptions. Staple all sheets together before you turn-in this homework assignment. Failure to do so will result in a reduction of your grade. Answer each question in full, and be sure to write clearly. You must show your work to receive full credit. 1. Suppose civil war in neighboring country creates a mass inflow of individuals into your country. This creates a one-time increase in your population, but doesn’t change the rate of population growth. Further, assume that these individuals are here to stay. In other words, they will not leave your country when the civil war is over. Use the Solow model to examine the potential effects of this emigration in these foreign nations. Show the effect of the one-time increase in population using the Solow model diagram. For full credit, you must label the diagram appropriately: Explain how this shock is predicted to affect the following in the short run: Capital per worker: Real Output: Real Output per worker: Savings per worker: Total Savings:
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Homework3 - Homework #3 ECO362 Summer II 2010 Tuttle...

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