Let be the physical capital stock per worker and be the real aggregate output per worker. Assume diminishing marginal productivity of physical capital per worker in the aggregate production function () expressed in terms of real output per worker = () for any given level of human capital and natural resources per worker, and technology. (a) Use a properly labeled graph to help you explain the theory of "catch-up" effect. (b) What is the major policy implication from the "catch-up" effect? (c) What is the fundamental fallacy of the "catch-up" effect?