| Question | Recall the growth-accounting equation [equation (1) on page 514). Calculate the growth of output if labor grows at 1 percent per year, capital grows at 4 percent per year, and technological change is 1112 percent per year. How would your answer change if: a. Labor growth slowed to 0 percent per year? b. Capital growth increased to 5 percent per year? c. Labor and capital had equal shares in GDP? Also, calculate for each of these conditions the rate of growth of output per hour worked. |
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| Subject | business economics |
