Chapter 5. The Solow Growth Model Consider the Economic Growth Model studied in class. There is a country with the following aggregate production function: Y = AKO.5[(1 - u)0.5 where u is the unemployment rate in the country. Suppose the following parameter values in year 2021: A = 1,s = 0.1, L = 1,d = 0.01, u = 0 Assume the following: I. Initially, in year 2021, the economy is in steady state at point A. II. Then, in year 2022, a recession occurs and u increases to 0.2, resulting in a new steady state point at point B (the rest of parameters A, s, L, d remain constant). III. Given part II, the government's objective is to reactivate the economy in year 2023 by achieving the amount of consumption per person that prevailed at point A. To this purpose, the country can choose only one of the two following potential policies: (i) Increase the savings rate s, or (il) Increase the technical parameter A. Note that the rest of parameters L, d remain constant. 1. (2 points). Find the value of A that attains the amount of consumption per person that prevailed in the initial steady state (point A). 2. (3 points). Find the value of s that attains the amount of consumption per person that prevailed in the initial steady state (point A). 3. (1 point). If the country wants to maximize the amount of steady state output Y* in year 2023, which policy should be chosen and why? Justify computing Y"