Question: The production function is Y = A Ka L1- a. If a = 0.3, and over the past year output grew 5 percent, capital grew

The production function is Y = A Ka L1- a. If a = 0.3, and over the past year output grew 5 percent, capital grew 2 percent, and labor grew 3 percent, what was the growth rate of total factor productivity (TFP)?

Select one:

a. 0 percent

b. 2.3 percent

c. 2.5 percent

d. 2.7 percent

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Over the past year, output grew -0.01, capital grew 0.02, and labor grew 0.02. If the elasticities of output with respect to capital and labor are 0.3 and 0.7, respectively, how much did productivity...

Over the past year, output grew 5%, capital grew 5%, and labor grew 1%. If the elasticities of output with respect to capital and labor are 0.3 and 0.7, respectively, how much did productivity grow?

can you answer these questions? 3) Over the past year, productivity grew 1%, capital grew 2%, and labor grew 2%. If the elasticities of output with respect to capital and labor are 0.3745 and 0.6255,...

Answer all the questions below and provide an explanation 5. Sam, who is 55 years old and has been a steelworker for 30 years, is unemployed because the steel plant in his town closed and moved to...

Tutors your help will be appreciated. SPli}.3 Transfer pricing Due to the expansion of business in Cogoland in recent years, SR Products has set up a marketing division there responsible for selling...

China is much more different from the US today than France ever was. Not only is its initial capital stock ( K 0) much lower, but there are many other important differences as will be discussed...

Following the war, Grandpa Frank was very bullish on the potential of the French market. He saw a country that would not only experience short-term growth through its rebuilding effort, but also...

China is much more different from the US today than France ever was. Not only is its initial capital stock ( K 0) much lower, but there are many other important differences as will be discussed...

Assignment for \"The Solow Model Unleashed: Understanding Economic Growth\" Based on Columbia CaseWorks 130304 1 Assignment Introduction & Algebra This case and assignment is intended to enhance your...

Arin Pate, CPA, is scheduled to work on the integrated audits of two client companies in the coming month: Jacoh Industries and Morton Baxx, Ltd. Arin was assigned to both of these audit engagements...

An assembly line has five workstations. Tasks at Workstation # 4 take the longest amount of time to complete with a total processing time of 75 seconds. 75 seconds is also the required cycle time....

Consider the following spot interest rates for maturities of one, two, three, and four years. r 1 = 6 . 2 4 , r 2 = 6 . 7 4 , r 3 = 7 . 4 4 , r 4 = 8 . 2 4 Assuming a constant real interest rate of 2...

The approach to delivering on - site service use by the Ritz - Carlton Hotel is an example of which of the following service delivery approaches? Production line approach Self - service approach...

Identify six problem members and explain how to handle them so they do not have a negative effect on your meetings.

Define the following 16 key terms throughout the chapter in bold with their definitions in italic.

List the five steps in the decision-making model.