|Question 1 Consider an economy that has the following production function: F = zF(K,N) : Klfswzfs where Y. 2,1'1' and N denote output, total factor productiyity, capital stock and labour employment respectiyely [z = 1 for simplicity}. Assume the depreciation rate d : 0.13, saying rate 3 : I112, and population growth rate n : [1.02. a} Write down the production function in per worker terms. ['1 morkj b} Calculate capital, income and consumption per capita in the steady state. Use a diagram to illustrate your answer. {2 marks} c} The economy is initially in the steady state that you calculated in part {b}. Now suppose that there is a surge in the saving rate such that s : 0.4. i] Calculate capital, income and consumption per capital in the new steady state. ['1 morkl ii} Use Excel to determine the path of the change in capital, income and consumption per capita until the new steady state is reached. You will need to attach this Excel sheet with your answers