Consider an economy described by the following production function:
Yt = zKt
where Yt is output, z measures total factor productivity (TFP), and Kt is physical capital.
a. Show that it is possible for output per work to experience unbounded grow in this economy.
b. Show that a higher saving rate increases the growth rate of output per worker.
c. Considering parts (a) and (b), what is different about this model, relative to the original Solow model
studied in class, that allows for unbounded growth (even if z is unchanged)?
