Kaldor facts:1.output per worker2. Capital per worker3. Capital/output ratio4. Rental rate of Capital5.real wage6. Capital share of income7. Labor share of income

Question 4.[20pt] Consider an economy with the following production function: K = VIVA/11M) where K is capital, N is lahour input and A is the effectiveness of labour. Assume that A is growing at exogenous rate gm N is growing at exogenous rate 9N and the capital stock depreciates at rate 6. Consumers save a share 3 of their income. a) Verify that this production has constant returns to scale. 1)) Derive output per effective worker (3} = Y/AN) as a function of capital per effective worker (I: = K/AN). c) What are the steady state values of 3:} and A? (1) Does this model adhere to all the classical Kaldor facts of economic growth? Show mathematically for each fact