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Problem 1. Depreciation in the Solow model (1 point). Consider an economy that behaves accord- ing to the Solow model with constant population and no technological progress. The aggregate production function in this economy is given by F(K, L) = AKaLla 7 The savings rate in the economy is s = 0.2 and the depreciation rate 6 = 0.1. The parameter or = 0.5 A = is a scaling parameter. For this exercise you can set L = L = 1. a. Find the value of A that ensures steady state output is equal to 1. b. What is the value of capital in steady state for this economy. 0. Suppose the depreciation rate increases to 5 = 0.2, what are the new values of steady state output and capital? (1. How would you interpret the ratio of steady state output in point (c) to the steady state output in point (a)