1.- The sources of economic growth.a) Complete the table below considering that the GDP of Ireland (at 2005 market prices) grewfrom 79 to 175 (thousands of millions €).b) Write down the growth accounting equation and define each of its components. Besides, foreach country, work out for the contribution to GDP growth of capital, labour and TotalFactor Productivity (TFP).c) Obtain the percentage contribution to growth of the production factors and PTF and discussthe main differences in sources of growth between the two countries over 1995-2015. Assessin which country is more important the contribution to capital to GDP growth.Annual growth rate (instantaneous growth rate): 1995-2015IrelandRomaniaGDP%2,50%Stock of capital3,72%2,56%Employment2,14% -1,39%Share of labour income on GDP0,600,55

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a) Complete the table below considering that the GDP of Ireland (at 2005 market prices) grew from 79 to 175 (thousands of millions €).

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter20: Economic Growth

Section: Chapter Questions

Problem 20RQ: For a high-income economy like the United States, what aggregate production function elements are...

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Question

1.- The sources of economic growth.
a) Complete the table below considering that the GDP of Ireland (at 2005 market prices) grew
from 79 to 175 (thousands of millions €).
b) Write down the growth accounting equation and define each of its components. Besides, for
each country, work out for the contribution to GDP growth of capital, labour and Total
Factor Productivity (TFP).
c) Obtain the percentage contribution to growth of the production factors and PTF and discuss
the main differences in sources of growth between the two countries over 1995-2015. Assess
in which country is more important the contribution to capital to GDP growth.
Annual growth rate (instantaneous growth rate): 1995-2015
Ireland
Romania
GDP
%
2,50%
Stock of capital
3,72%
2,56%
Employment
2,14% -1,39%
Share of labour income on GDP
0,60
0,55

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