6. Consider a closed economy in which the population grows at the rate of 1 °/o per year. The per-worker production function is y == 6Vk, where y is output per worker and k is capital per worker. The depreciation rate of capital is 14°/o per year.

a. Households consume 90°/o of income and save the remaining 10°/o of income. There is no government. What are the steady-state values of capital per worker, output per worker, consumption per worker, and investment per worker?

b. Suppose that the country wants to increase its steady-state value of output per worker. What steady-state value of the capital-labor ratio is needed to double the steady-state value of output per capita? What fraction of income would households have to save to achieve a steady-state level of output per worker that is twice as high as in Part (a)?