Do the following produciion functions exhibit constant returns to scale? You should assume the inputs are doubled and see what will happen. [You can even assign some specic values to K and L] (a) Y = aK + bN (b) Y = KN (c) Y: s/KE'N The production function of an economy is Y = I KAN . The growth rate of workers (N) is gN and the growth rate of technology (A) is g5. (a) Rewrite the production function as a relationship between output per effective worker (YXAN) and capital per effective worker (Iii/AN). 03) Saving rate is s. Depreciation rate is 6. What is the steady-state condition? Use a diagram to illustrate the steady state. Calculate the steady-state KXAN. (c) If saving rate increases, will the output per effective worker and capital per effective worker in the new stead}r state be higher or lower? Use a diagram to illustrate. [You can use the same diagram in 00).] (d) What is the steady-state output per worker (Y / N) growth rate? Briey explain whether or not saving rate will affect the growth rate of Y/ N at all. Use a diagram to illustrate if it is needed