1. Solow model. Consider the standard Solow growth model with technological progress (g) and pop- ulation growth (n), where g and n are positive and exogenous. Assume that the economy is initially on the balance growth path. Suddenly there is a one-time unex- pected and permanent downward jump in the number of workers due to a government repatriation program of illegal immigrants. Explain both the immediate and transitional effect of this jump on capital per ef- fective worker and output per effective worker. Draw the time path of output per capita and compare it to the case without the repatriation program.

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1. Solow model. Consider the standard Solow growth model with technological progress (g) and pop- ulation growth (n), where g and n are positive and exogenous. Assume that the economy is initially on the balance growth path. Suddenly there is a one-time unex- pected and permanent downward jump in the number of workers