Answer the questions

Question 1 [15 pts] Consider the human capital growth model with the representative oonsumer. The eicieney pa- rameter of human capital accumulation technology is b. The total productivity factor is given by z = 1.5. Denote by H; the human capital accumulated in period t, and by u the time spent working in period t. Assume the initial human capital is Hg = 1. Now, assume the consumer has to choose between (not) = (63,1035) and (19,52) = ((13,520). 1. Using the predictions of the Endogenous Growth Model for the consumption [math1 which set of (it, b) will you recommend to the consumer in the long term. [pts] 2. After how many years is your recommendation valid? [09pm]