1. Ensure that you can write down the accumulation equation (using a Cobb- Douglas production function) in units of capital per reective worker. Derive the expressions for the capital stock per effective-worker, output per effective- worker and consumption per effective-worker in the steady state. Do not submit this but make sure that you can start from the accumulation equation for capital (in levels) and arrive at these steady state expressions of variables in efciency units using less than three minutes (showing all your work to yourself). 2. Provide a denition for the steady state of the Solow model when there is positive population growth and positive technological progress. Typically, it is believed that technological progress contributes in a positive manner to output growth. Why is it that higher values of 9 result in lower values of 33* (that is, lower values of output per efciency-unit of labour in the steady state)? Is that contrary to the popular belief that technological process aids in output growth? 3. Explain Why diminishing returns to capital in the aggregate production function results in the possibility of over- or undersaving in the steady state of the Solow growth model. You are only responsible for submitting answers for the last two questions