Question: 3 . Suppose that the aggregate production function is adequately modeled as a Cobb - Douglas function = . 3 , the capital input grows
Suppose that the aggregate production function is adequately modeled as a CobbDouglas
function the capital input grows at a rate, and the labor input grows at a rate.
These are, of course, exponential growth rates.
a If real output grows at an rate, what is the growth rate in multifactor productivity?
b If multifactor productivity grows at a rate, how fast will real output grow?
c If multifactor productivity grows at a rate, at what rate is labor productivity ie
output per unit of labor used growing?
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