CO O anamics Property of FIU Economics Property of FIU Econ 18. Consider the following version of Solow's model of economic growth: 1/3 omics Property of FIU Economies Property of FIU Eco Ct = (1 - s)yt .Fi, = synomics Property of FIU Economics Property of FIU Econ . Akt.t+1 = syt - (n+ 8)kt . s = 0.36 mics Property of FIU Economies Property of FIU Ecor 8 = 0.01 on = 0.03 omics Property of FIU Economics Property of FIU Eco a. What will capital per worker (k) and real income per person (y) be once this economy off reaches its steady-state? OU Economics Property of FIU Eco b. What will the growth rate of real income per person (%Ayt.t+1) be in the steady state? c. What will the growth rate of real aggregate income (%Yt,t+1) be in the steady state? Hint: By definition Y = y x L, and n = %ALt,t+1. d. Suppose the population growth rate (n) falls from 3% per year to 0% per year. What will the new steady-state value of capital per worker be? e. What will y, %Ayt,t+1, and %AYt,t+1 be in the new steady state? perty of FIU Econ