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We are researching a certain country and we want to develop a baseline model to study its aggregate production. Before we begin our study, we

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We are researching a certain country and we want to develop a baseline model to study its aggregate production. Before we begin our study, we must select the appropriate aggregate production function. The two potential functions f1 and f2 are: W Y = fi(K, L) = AK= (L x h)? (1) Y = f2 (K, [) = A + K +(L xh) (2) We also assume that the quantity supplied of labor L, and the quantity supplied of capital K. are exogenous and constant, such that L: = I (3) K s = K (4) where e. Denote the per worker capital stock by k = A. Find the equilibrium per worker output y* = -. [Derivation not required.]

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