Need help with (i) and (ii) please
Solow's growth model assumes households save a given constant fraction, s, of their income, at all times. Suppose, however, that households' saving behaviour results from maximising their utility from per-capita consumption over their infinite lifetimes, and that they earn wage income which may vary over time.
i. Provide some careful verbal arguments as to why it may not be rational for the household always to save its income at the same constant rate.
ii. If such households are part of a competitive market economy in which there is a constant-returns-to-scale production technology and also population growth,
briefly discuss what determines how large its saving rate will be in the long run.