Question: 1. Neoclassical Production Function a) Write the production function in its simplest form (human capital being included in A) and explain the content and

1. Neoclassical Production Function a) Write the production function in its simplest form (human capital being included in A) and explain the content and meaning of each factor. (10 p) b) Write the logarithmic form of this production function, still in its simplest form. In a country it is observed that during a period of 10 years average GDP growth (Log Y) is 5%, Log K 6% and Log L 3%. Alpha has been estimated as 0.4. Compute the contribution of TFP (Log A) to GDP growth. (lop) c) in the same country during the following 10 years it is observed that average GDP growth remained at but Log K decreased to 5% and Log L to 2%, Alpha being still estimated as 0.4. Compute the contribution of TFP (Log A) to GDP growth in this period and explain what might be happened in the economy of this country during the second in regards Of TFP, capital accumulation and labour. (20p)

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