3. Employment/population growth rate=gN; technology growth rate=gA; depreciation rate=. Labor force participation rate is constant. The economy is initially in the steady state.

Explain: (a) what happens to the steady state values of K/AN and Y/AN in each of the following cases (illustrate your answers); and (b) what are the rates of growth of K/AN, Y/AN, K/N, Y/N, K, and K at the initial and the final steady states.

a. A higher savings rate

b. A higher rate of technological growth