Output in an economy is given by the production function, Y-AK0.25 0.75 where Y is output and A measures total factor productivity. The capital stock K is fixed at 29 and employment N is fixed at 118. Output equals 106 in the year 2012 and equals 112.36 in 2013. a. Calculate the Solow residual in the year 2012: Calculate the Solow residual in the year 2013: (Enter your response rounded to four decimal places.) (Enter your response rounded to four decimal places.) Calculate the growth rate of the Solow residual between the years 2012 and 2013%. (Enter your response as a percentage rounded to two decimal places.) b. The growth rate of the Solow residual OA. is equal to the growth in productivity as measured by the parameter A. B. may be greater than, less than or equal to the growth in A, depending on the production function. OC. is less than the growth in productivity as measured by the parameter A. D. is greater than the growth in productivity as measured by the parameter A.
Output in an economy is given by the production function, Y-AK0.25 0.75 where Y is output and A measures total factor productivity. The capital stock K is fixed at 29 and employment N is fixed at 118. Output equals 106 in the year 2012 and equals 112.36 in 2013. a. Calculate the Solow residual in the year 2012: Calculate the Solow residual in the year 2013: (Enter your response rounded to four decimal places.) (Enter your response rounded to four decimal places.) Calculate the growth rate of the Solow residual between the years 2012 and 2013%. (Enter your response as a percentage rounded to two decimal places.) b. The growth rate of the Solow residual OA. is equal to the growth in productivity as measured by the parameter A. B. may be greater than, less than or equal to the growth in A, depending on the production function. OC. is less than the growth in productivity as measured by the parameter A. D. is greater than the growth in productivity as measured by the parameter A.
Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations
Section: Chapter Questions
Problem 2P
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