Consider a version of the Solow model where the population, Lt, grows at rate n, but labour efciency is constant and normalized to one. A 'action s of income is invested in capital, Kt, every period. Capital depreciates at rate 6. The production technology is Cobb-Douglas and given by: Y: = K/ZL/z a. Derive an expression for the accumulation of capital per worker in this economy, i.e. AkHl, where kt E Kt/Lt. (5 points) b. What is the steady state condition in this economy? Illustrate the equilibrium in a diagram. (4 points) 0. Suppose that n = 1/10, 6 = 1 / 10 and s = 2/5. Compute the steady-state level of capital per worker, i.e. k\". (4 points) (1. Analyse the effects of a decrease in the population growth rate using a diagram. Explain the intuition. (5 points) e. State an important criticism of the Solow model. (2 points) f. Suppose instead that the production technology is given by: 1 Yr=Kt A constant fraction, 5 = 2/5, of income is still invested in capital each period and capital still depreciates at rate 6 = 1 / 10. The population is constant and normalized to 1. Is there GDP growth in this model? Why/Why not? Motivate your answer. (5 points)