Consider an economy at the steady state. Labor force grows at the g N and technology grows at the rate g A . Consider the effects of three shocks:

Consider an economy at the steady state. Labor force grows at the gN and

technology grows at the rate gA.

Consider the effects of three shocks:

(a) A higher rate of population growth;

(b) An increase in the rate of technological change;

(c) A decline in the rate of savings.

What are the rates of growth of K/AN, Y/AN, K/N, Y/N, K, and Y at the

initial and the new steady state?