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1) The Solow model is still at the core of New Growth Theory

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1) The Solow model is still at the core of New Growth Theory. Please draw a graph for EACH of the following three questions. Draw an aggregate production function for a hypothetical nation. Draw the production function as we do in Chapter 12, with an emphasis on the capital resource. Labor both axes and label your production function F0.

2)Suppose several million new workers enter the nation. Show this change on your graph in question 14, carefully distinguishing the new situation from the old. If you have a new production function, label it F1.

3)Now suppose the nation invests in new capital, increasing the total capital stock in the nation. Show this change on your graph in question 15, carefully distinguishing the new situation from the old.