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Destinyyyy
 one year ago
Suppose that an economy grows by 6 percent, total factor productivity grows by 4 percent, and the capital stock increases by 2 percent.....
Destinyyyy
 one year ago
Suppose that an economy grows by 6 percent, total factor productivity grows by 4 percent, and the capital stock increases by 2 percent.....

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Destinyyyy
 one year ago
Best ResponseYou've already chosen the best response.0Suppose that an economy grows by 6 percent, total factor productivity grows by 4 percent, and the capital stock increases by 2 percent. If labor and capital are the only inputs used in production and capital contributes 25 percent to GDP, then the labor force has risen by _____. Question 10 options: 1) 1.5 % 2) 2% 3) 4% 4) 6% 5) 8%

ybarrap
 one year ago
Best ResponseYou've already chosen the best response.0I might be able to help if you tell me the relationships between economy, factor productivity and capital stock Is economy (E) a function of stock (S) and productivity (P)? Something like $$ E=\alpha S + \beta P +\delta SP~? $$ Where \(\alpha, \beta~\&~\delta\) are constants

Destinyyyy
 one year ago
Best ResponseYou've already chosen the best response.0My book shows this @ybarrap

ybarrap
 one year ago
Best ResponseYou've already chosen the best response.0Ok, so $$ \%\Delta Y=\%\Delta\text{TFP}+0.7(\%\Delta L)+0.3(\%\Delta K) $$ Givens: $$ \%\Delta Y=6\\ \%\Delta\text{TFP}=4\\ \%\Delta K=2 $$ We need to find \(\%\Delta L\), percent change in the labor force. Using the first equation: $$ \%\Delta Y=\%\Delta\text{TFP}+0.7(\%\Delta L)+0.3(\%\Delta K)\\ 6=4+0.7(\%\Delta L)+0.3\times 2\\ \implies \%\Delta L=\cfrac{640.3\times 2}{0.7}\\ $$ Does this make sense?

Destinyyyy
 one year ago
Best ResponseYou've already chosen the best response.0Um yes? But I completed this question 3 hours ago. I took a guess and got it right.
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