a) What is the numerical value of the saving rate maximizes steady state output per effective worker? Clearly explain why households would have a problem with this saving rate.
b) In the steady state, what are the growth rates of Y /(EL), Y /L, and Y ?
c) Policymakers are debating between two policies for raising output per worker:
A. Permanently increase the saving rate s.
B. Permanently increase the growth rate of labor efficiency g.
Which of the two policies – A or B – will have a greater effect on output per worker in the long-run? Explain.
Please show me how to do it. really appreciated