(Solved): Question 2 SOLOW GROWTH MODEL: In the graphical presentation of the Solow Growth model, (a) On a \( ...

Question 2 SOLOW GROWTH MODEL: In the graphical presentation of the Solow Growth model, (a) On a \( Y / L \) (output per labor) and \( K / L \) (capital per labor) space, show the production function given by the following functional form. (b) Explain and show the investment decisions at each \( \mathrm{K} / \mathrm{L} \) level in the economy and its relation to saving rate s. (c) Explain and show how the loss in the \( K / L \) ratio occurs each year, when labor grows at \( n \) percent every year and the rate of depreciation of capital is \( \delta \). Define a Steady State Equilibrium. Verbally explain the conditions for the steady state equilibrium in an economy with \( (Y / L) r=f(K / L) \) t production. Show on the above graph the steady state equilibrium \( K / L \) ratio and the corresponding \( Y / L \). (d)If there is an increase in the saving rate s, what happens to the steady state \( K / L \) and \( Y / L \) levels? (e) If there is an improvement in technology, what happens to the steady state \( K / L \) and \( Y / L \) levels? (f) If there is an increase in population growth rate, what happens to the steady state \( K / L \) and \( Y / L \) levels?