5. Consider an economy where the elasticity of output with respect to capital is 0.3 and the elasticity of output with respect to labor input is 0.7. If we assume that the growth rate of output is 3% and the growth rate of both capital and labor input is 2%, what is the implied total factor productivity growth?

5. Consider an economy where the elasticity of output with respect to capital is 0.3 and the elasticity of output with respect to labor input is 0.7. If we assume that the growth rate of output is 3% and the growth rate of both capital and labor input is 2%, what is the implied total factor productivity growth?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Production And Growth

Section17.1: Economic Growth Around The World

Problem 1QQ

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