Question: Consider the same setup as at the start of Problem 1.10: the economy is described by the assumptions of the Solow model, except that factors

Consider the same setup as at the start of Problem 1.10: the economy is described by the assumptions of the Solow model, except that factors are paid their marginal products and all labor income is consumed and all other income is saved. Show that the economy converges to a balanced growth path, and that the balancedgrowth-path level of k equals the golden-rule level of k. What is the intuition for this result?

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