Question

In 2018 countryX GDP grew by 3%.

During the same period, the capital stock grew by 6% and the population decreased by 3%.

By how much did total factor productivity grow in countryX for the same period?

Answer 1

. % ∆Gross Domestic Product = % ∆TFP + 0.70 [% ∆L]+ 0.30 [% ∆K]

here-

∆TFP equals alteration in total factor productivity

∆L equals Increase in the amount of labour

∆K equals Increase in the stock of capital

Insert all the given values-

3%={%TFP} +{0.7X(-3%)}+{0.3X(6%)}

%TFP=3%