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2. Consider the production function you were presented with in Homework 2, adjusted for the Augmented 39le Growth Model: Yr 2 AF(KtIZtNt) = A[Kiz(ZtNt)1_a] Where
2. Consider the production function you were presented with in Homework 2, adjusted for the Augmented 39le Growth Model: Yr 2 AF(KtIZtNt) = A[Kiz(ZtNt)1_a] Where C > 0 and a E (0,1), and you showed that it was a constantreturnstoscale function. a. Write this function in per efficiency units terms. That is, find f (fit) so that fit 2 A f (1%) A : Vt A : Kt where yr _ ZtNt and kt _ ZtNt- b. Derive f (f9) and f (litt) and state whether each is greater than, equal to, or less than zero, assuming that kt 2 0. c. In the Augmented Solow Growth Model, we have 1 kt+1 = mklWQ + (1 5)kt], were 0
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