Consider the Solow growth model. Suppose that F(K, N) = zK^a N^1-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 work

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A: Y = K1/3(AN)2/3 --------------> production function. Where Y is output; K is capital; and AN is…

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A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

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A: Amount of labor (L) = 1000Investment rate (s) = 0.1Depreciation rate (d) = 0.4Productivity (A) = 1

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A: “Since you have posted a question with multiple sub-parts, we will provide the solution only to the…