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5.1 Suppose an economy's production function is Y = AK"L-«. If the annual rate of economic growth is 4.5 per cent and labour and capital are both growing annually by 3 per cent and 4 percent respectively, what contribution to growth is made by total factor productivity? You can assume that labour receives 65 per cent of the total income generated in this economy.

5.1 Suppose an economy's production function is Y = AK"L-«. If the annual rate of economic growth is 4.5 per cent and labour and capital are both growing annually by 3 per cent and 4 percent respectively, what contribution to growth is made by total factor productivity? You can assume that labour receives 65 per cent of the total income generated in this economy.

Principles Of Marketing
Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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Question 5 5.1 Suppose an economy's production function is Y = AK“L'«. If the annual rate of economic growth is 4.5 per cent and labour and capital are both growing annually by 3 per cent and 4 percent respectively, what contribution to growth is made by total factor productivity? You can assume that labour receives 65 per cent of the total income generated in this economy. 5.2 Does this mean that labour contributes 65 per cent of the increased output? Explain.
Transcribed Image Text:Question 5 5.1 Suppose an economy's production function is Y = AK“L'«. If the annual rate of economic growth is 4.5 per cent and labour and capital are both growing annually by 3 per cent and 4 percent respectively, what contribution to growth is made by total factor productivity? You can assume that labour receives 65 per cent of the total income generated in this economy. 5.2 Does this mean that labour contributes 65 per cent of the increased output? Explain.
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