Answered: Assume that capital share is 35%. GDP…

Assume that capital share is 35%. GDP in country A grew at the rate of 3.5% per year. Capital grew at a rate of 5% and labor 0.5% per year. What is the growth rate of TFP? Please explain step by step

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter20: Economic Growth In The Global Economy

Section: Chapter Questions

Problem 8P

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Assume that capital share is 35%. GDP in country A grew at the rate of 3.5% per year. Capital grew at a rate of 5% and labor 0.5% per year. What is the growth rate of TFP?

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