Question

In: Economics

From one year to the next, a country’s output rose from 4,000 to4,500, its capital...

From one year to the next, a country’s output rose from 4,000 to 4,500, its capital stock rose from 10,000 to 12,000, and its labor force declined from 2,000 to 1,750. Suppose aK = 0.3 and aL = 0.7. 11. How much did capital contribute to economic growth over the year? 12. How much did labor contribute to economic growth over the year? 13. How much did productivity contribute to economic growth over the year?

Solutions

Expert Solution

Given data

Output rose from 4000 to 4500

Capital stock rose from 10000 to 12000

labour force declined or labour stock falls from 2000 to 1750

( output elasticity of capital)

11)

Capital contribute to economic growth over the year

12)

Labour contribute to economic growth over the year

13)

Productivity contribute to economic growth over year

Productivity cotribute to economic growth over the year is 15.25%

Rahul Sunny answered 1 year ago

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