Question: I would like to know how to solve this question to compare with my answer. Thank you :) Question 6 [20 pts] Consider the human
I would like to know how to solve this question to compare with my answer. Thank you :)

Question 6 [20 pts] Consider the human capital growth model with the representative consumer who lives in two periods (0, 1). The efciency parameter of human capital accumulation technology is b = 4.5. The total productivity factor is given by z = 3 in period 0 and z = 1.5 in period 1. Denote by H; the human capital accumulated in period t, and by u the time spent working in period t. Assume the initial human capital is H0 = 3. 1. Compute Co, 01 as functions of u. [05 pts] 2. Assume the consumer is willing to maximize the lifetime utility function, lI1(C'1) L =l U I1(C'0)+ 1+7. where r = 0.1 is the real interest rate. Give the optimal value of u? [10 pts] Remark: You are NOT allowed to use an online solver when answering this question. 3. Assume some massive investment in the education system made by the government increases (2 to 5. How will this policy affect the optimal u of the consumer? Quantify the implication of this policy for the long-term consumption growth. [05pts]
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