Many demographers predict that the US will have zero population growth in the 21st century, in contrast to the population growth of about 1% in the 20th century.
(a) Use the growth model (assuming that there is no technological progress) to forecast the effect of this decrease in the population growth rate on
(i) The long run level of output per worker (Y/L) (i.e. the standard of living)
(ii) The long run growth rate of output per worker (Y/L)
(iii) The long run growth rate of aggregate output (Y/L)
(iv) The growth rate of output per worker (Y/L ) in the short run.
(b) Contrary to the assumption in part a,there was technological progress in the 20th century, i.e. the technology growth rate g>0. Suppose this rate of technology growth g is expected to be the same in the 21st century. Now let us consider the same question as before: What is the effect of the decrease in the population growth rate on
i. The long run growth rate of output per worker (Y/L)
ii. The long run growth rate of aggregate output (Y)?