Question: please answer with explanations, thank you Consider the human capital growth model with the representative consumer. The efciency pa- rameter of human capital accumulation technology

please answer with explanations, thank you

please answer with explanations, thank you Consider the human capital growth model

Consider the human capital growth model with the representative consumer. The efciency pa- rameter of human capital accumulation technology is b. The total productivity factor is given by z = 1.5. Denote by Ht the human capital accumulated in period t, and by a the time Spent working in period t. Assume the initial human capital is H0 = 1. Now, assume the consumer has to choose between (151, bl) = (0.9,1035) and (152,52) = (0.8, 5.20). 1. Using the predictions of the Endogenous Growth Model for the consumption path, which set of (u, b) will you reCOmmend to the consumer in the long term. 2. After how many years is your recommendation valid

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