2. (20 points) An economy initially has 1,000 units of physical capital per worker. Each year it increases the amount of physical capital per worker by 5%. According to the aggregate production function for this economy, each 1% increase in physical capital per worker, holding human capital and technology constant, increases output per worker by 0.20%. Assume no inflation in this economy. After 3 years, what is the level of physical capital per worker in this economy? Suppose output per worker is initially $500. After 1 year, what does the estimated output per worker equal? c. Suppose that output per worker after year 1 is $525. Assuming that physical capital per worker increased by 5%, what does this imply about productivity growth in the economy in year 1? Explain. d. What are the potential sources of changes in productivity growth? oW