Question: Consider the AK model in which we do not normalize the size of the labor force to one. (a) Using the production function in equation

Consider the AK model in which we do not normalize the size of the labor force to one.

(a) Using the production function in equation (8.5) and the stan- dard capital accumulation equation, show that the growth rate of output depends on L.

(b) What happens if L is growing at some constant rate n?

(c) Specify the form of the externality in equation (8.4) differently to avoid this implication.

(d) Does labor affect production?

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