Using the growth accounting equation, if the growth rate of output is 5%, the growth of...
Using the growth accounting equation, if the growth rate of output is 5%, the growth of labor is 2% and the growth of capital is 2% then if α=0.50 then growth of technology can be estimated to be:
Multiple Choice
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4.25%.
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4.00%.
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3.00%.
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4.75%.
Homework Answers
growth rate of output=α*growth of capital+(1-α)*growth of labor+growth of technology
5%=0.50*2%+(1-0.50)*2%+growth of technology
5%=1%+1%+growth of technology
growth of technology=5%-1%-1%
=3.00%
the above is answer..
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