(5 marks) it is found that the real GDP per capita of developing countries grows faster than developed countries at the same period. Explain this phenomenon in the light of diminishing returns to capital. (11 marks) a. Suppose in a close economy, GDP is $10 trillion, taxes are $2 trillion, private saving is $1.5 trillion, government spending is $1 trillion. Calculate consumption, budget balance, national saving, and investment. (4 marks) b. Suppose that in a closed economy the government enjoys a huge budget surplus every year and decides to cut budget surplus by spending more on public infrastructure projects. Use a supply- and-demand diagram of loanable fund market to analyze the effect of this policy action on interest rate and investment. (7 marks)