1) Assumethat there are two islands that are closed economies and they have the following in common: Y = (K)W(E a: LJW .5 = .10 g = .04 In the first year, El = 10 and L1 = 10 in both islands. a) Find the equation for output per effective worker (y) as a function of capital per effective worker (k). b) Assume that both islands differ in their savings rates and population growth rates: Island 1: s = .20 and n = .06 Island 2: s = .60 and n = .01 Calculate the steadystate level of capital per effective worker (k') and output per effective worker (y') in each island. Y w R. . . . c) For year 1, calculate K, Y, I'F' and F In both Islands assuming that both are at their steady- state equilibrium. d) Calculate the same variables as in (c) for year 2 taking account for the exogenous growth in both the level of technology (E) and the population (L) in each island. e} Calculate the growth rates of these variable from year 1 to year 2 in each island