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a) Considering the Solow model. In steady state, at what rate does output per person grow and capital per person grow? What does this imply
a) Considering the Solow model. In steady state, at what rate does output per person grow and capital per person grow? What does this imply for output per effective worker? (3) b) Consider a country with an initial steady state of 10 percent where gA=0.02,gN=0.03 and =0.02. Identify the Golden Rule steady state and suggest what needs to happen to k to achieve the Golden Rule steady state. (3) c) Illustrate and explain why changes in the savings rate does not lead to an increase the steady state-level of ourpput per effective worker. What effect will this have on investment, explain. (7) d) Briefly discuss how countries leading the path of Al research can transfer this technology to follower countries and what are some of the concerns related to this transfer. (4)
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