Write out the equation for output growth with capital, labor and total factor productivity as determinants of growth. Suppose that the shares of capital and labor are respectively 0 .3 and 0.7. If labor supply grows by 10% what would be the growth rate of output assuming that there is no change in the other determinants? What would happen to per capita output if labor supply growth is entirely due to population growth?

Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter16: Economic Growth
Section: Chapter Questions
Problem 5E
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Write out the equation for output growth with capital, labor and total factor productivity
as determinants of growth. Suppose that the shares of capital and labor are respectively
0 .3 and 0.7. If labor supply grows by 10% what would be the growth rate of output
assuming that there is no change in the other determinants? What would happen to per
capita output if labor supply growth is entirely due to population growth? 

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