Question: Consider Solow model with the production function: F (K, N) = zNK 1 , with 0 < < 1. Assume the capital depreciates at a

Consider Solow model with the production function: F (K, N) = zNK 1 , with 0 < < 1.

Assume the capital depreciates at a rate d, the savings rate is s, the population grows at a rate n, and the total factor productivity is z. Suppose the unit period is one year.

1. Give the golden rule level of capital k ** .

2. Find the highest level of consumption per capital c **

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