Question 1. Assume the Solow growth model with zero population growth and zero productivity growth. Assume also a Cobb Douglas production function of the form: y = Af(k) = Aka (i) Derive in detail an equation for the steady state output per worker in terms of the saving rate and the level of technology. [2 marks] (iii) Suppose that two countries are governed by this Solow growth model (in part (i) above) and that they have different but constant saving rates and different levels of technology. What can we say about the difference in GDP per capita between the two countries over time? Explain. [2 marks] (iii) Using your answer to (i), explain the role of the capital and labour shares of GDP in determining the effect of saving on GDP per capita. [1 mark]