Assume a production function with constant returns to scale. Labour's share of income is 4/5 and capital's share is 1/5. If labour grows at 3%, capital ot2%, and the rate of technological advance is 1.2%, roughly how many years would it take to double the current level of output?Multiple Choice1218233548

Capital = α = 1/5 Labor = (1- α )= 4/5 Y= A*Kα*Lα (Cobb Douglas)Y= A*K1/5L4/5 which is a…

Assume a production function with constant returns to scale. Labour's share of income is 4/5 and capital's share is V5. If labour grows at 3%, capital at 2%, and the rate of technological advance is 1.2%, roughly how many years would it take to double the current level of output? Multiple Choice 23

Assume a production function with constant returns to scale. Labour's share of income is 4/5 and capital's share is V5. If labour grows at 3%, capital at 2%, and the rate of technological advance is 1.2%, roughly how many years would it take to double the current level of output? Multiple Choice 23

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter27: Investment, The Capital Market, And The Wealth Of Nations

Section: Chapter Questions

Problem 3CQ

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Question

Assume a production function with constant returns to scale. Labour's share of income is 4/5 and capital's share is 1/5. If labour grows at 3%, capital ot
2%, and the rate of technological advance is 1.2%, roughly how many years would it take to double the current level of output?
Multiple Choice
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