Question: question2 pls Question 2: (5 points) Consider the Solow growth model. Suppose that F(K, N) = zK N1-a where a = 0.3. Also, assume that

question2 pls

question2 pls Question 2: (5 points) Consider the Solow growth model. Suppose

Question 2: (5 points) Consider the Solow growth model. Suppose that F(K, N) = zK N1-a where a = 0.3. Also, assume that capital depreciation rate is 10% (that is d = 0.1), savings rate is 25% (that is s = 0.25), populations growth rate is 2% (that is n = 0.02), and z = 2. First, determine capital per worker, income per capita, and consumption per capita in the steady state. Second, assume that the savings rate has increased to 40% but the total factor productivity decreases to 1. Discuss the effect of savings and productivity on the steady state level of consumption per worker

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