1. Consider the Solow growth model from class. Assume the production function is Cobb- Douglas, i.e. Y = zKo Ni-a for a E (0, 1).
1. Consider the Solow growth model from class. Assume the production function is Cobb- Douglas, i.e. Y = zKo Ni-a for a E (0, 1). (a) Solve for the golden rule level of capital per worker, kar. (b) Use your solution above to show how k* changes with TFP. (c) Use a graph to illustrate how a decrease in TFP changes the golden rule level of capital per worker. Describe your findings in words
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