4. Solow Growth Model Consider a Solow Growth Model. A nation's production is a function of Labor and Capital, given as F(K, N) = 2K0.4 N0.6. Depreciation rate of this economy is 4% and population growth rate is 2%. Saving rate of this economy is 18%. Assume TFP z=1 (a) Find Steady-state level of capital, production, consumption and investment per-capita. (2 pts) (b) Find a Saving rate that maximizes consumption per-capita of this economy. (2 pts) (c) Now, suppose in this model economy, people in this model economy encounter aliens, known as Navi, and the benevolent aliens teach the people some alien technology. Thus, z goes up from 1 to 2. Find new Steady-state level of capital, production, consumption and investment per-capita. (2 pts) (d) Suppse the aliens' home planet, Pandora, possess a capital per-capita of 5 today. While in the economy of prob- lem (c) above, they possess a capital per-capita of 3 today. With the bumping-up of the productivity to 2, how many periods does it take for the economy in (c) to catch-up the Pandora's today capital per-capita of 5. (2 pts) 4. Solow Growth Model Consider a Solow Growth Model. A nation's production is a function of Labor and Capital, given as F(K, N) = 2K0.4 N0.6. Depreciation rate of this economy is 4% and population growth rate is 2%. Saving rate of this economy is 18%. Assume TFP z=1 (a) Find Steady-state level of capital, production, consumption and investment per-capita. (2 pts) (b) Find a Saving rate that maximizes consumption per-capita of this economy. (2 pts) (c) Now, suppose in this model economy, people in this model economy encounter aliens, known as Navi, and the benevolent aliens teach the people some alien technology. Thus, z goes up from 1 to 2. Find new Steady-state level of capital, production, consumption and investment per-capita. (2 pts) (d) Suppse the aliens' home planet, Pandora, possess a capital per-capita of 5 today. While in the economy of prob- lem (c) above, they possess a capital per-capita of 3 today. With the bumping-up of the productivity to 2, how many periods does it take for the economy in (c) to catch-up the Pandora's today capital per-capita of 5. (2 pts)