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In the Solow growth model, how the government regulation would affect the consumption per worker in the long run

Suppose that economy starts in steady state. According to the solow growth model, how would each of the following affect consumption per worker in the long run Assume that the growth model is AK.

a) A rise in government regulations whose net effect is to lower the marginal productivity of capital.

b) The destruction of a portion of the nation\'s capital stock in a war.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M921350

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