A countrys labor force grows by 2 percent and its capital stock grows by 3 percent. Assume

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A country’s labor force grows by 2 percent and its capital stock grows by 3 percent. Assume that share of labor in output is 0.4.

a. If the economy grows by 5 percent, how much does total factor productivity grow? Show your calculations.

b. What are the limitations of the Solow residual method?

Related Book For answer-question

The Macro Economy Today

ISBN: 978-1259291821

14th edition

Authors: Bradley R. Schiller, Karen Gebhardt

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Posted Date: Apr 03, 2020 05:07 AM

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A countrys labor force grows by 2 percent and its capital stock grows by 3 percent. Assume

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a SOLOW RESIDUAL MEASURE states as follows Total Factor Productivity Tota... View the full answer

The Macro Economy Today

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