Question

****Only need 2c answered, just posted entire question for reference****

2. Growth Accounting) Suppose that the representitive frm's production funetion is Cobb Douglas: (a) Show that the growth rate of total output ean be decomposited as A 0.3K, 0.7 +뿌뿌 Hint: You may take logarithm to equation (4)n both sids,then use chain rule to take derivative with repect to time t) (b) Suppuase in the year 2016, cun pred to 2015 the total output increases by 3%, and the technology keeps the siune (no change in A). Also the labor force incenses by OLI5% compared to 2015. What is the growth rate of total capital compared to 2015? )Suppose between 2018 and 2017, the difference between the total output's growth rate and the total labor force's growth rate is 1%, nnd the difference beween uie total output's growth rite and the total capitals growth rate s 2%. Then what is the growth rate of total fnctor productivity (A) between 2018 and 2017?

Answer 1