From one year to the next, a country's output rose from 4000 to 4500, its capital stock rose from 10,000 to 12,000, and its labor force declined from 2000 to 1750. Suppose aK = 0.3 and aN= 0.7
(a) How much did capital contribute to economic growth over the year?
(b) How much did labor contribute to economic growth over the year?
(c) How much did productivity contribute to economic growth over the year?
(a) aK ?K/K = 0.3(2000 / 10,000 ) = 6%.
(b) aN ?N/N = 0.7 (-250 / 2000 ) = -8.75%.
(c) ?Y/Y = 500/4000 = 12.5%.
?A/A = ?Y/Y - aK?K/K - aN ?N/N
= 12.5% - 6% - (-8.75%)
= 15.25%.
You might also like to view...
What effect does a price hike have on the total revenue of the producers?
What will be an ideal response?
Refer to the figure above. At what level of output does the firm maximize profits?
A) 0 units B) 10 units C) 20 units D) 30 units
When Tom's income increases, his demand curve for Mountain Dew shifts rightward because the higher income increases his marginal utility of Mountain Dew
Indicate whether the statement is true or false
A. Define the term "globalization."
b. Describe the benefits of globalization. c. Who is likely to oppose globalization and why? What will be an ideal response?