Assume that an economy described by the Solow model is in a steady state with output and capital growing at 3 percent, and labor growing at 1 percent. The capital share is 0.3. The growth-accounting equation indicates that the contributions to growth of capital, labor, and total factor productivity are:____________-
A) 0.3 percent, 0.7 percent, and 2 percent, respectively.
B) 0.9 percent, 0.7 percent, and 1.4 percent, respectively.
C) 0 percent, 1 percent, and 2 percent, respectively.
D) 1.8 percent, 0.3 percent, and 0.9 percent, respectively.

Answers

Answer 1

Answer:

The growth-accounting equation indicates that the contributions to growth of capital, labor, and total factor productivity are 0.9%, 0.7%, and 1.4%, respectively.

Explanation:

Given

Capital growing = 3%

Labor growing = 1%.

Capital share = 0.3

Assuming the economy is in a steady state;

The growth accounting equation is as follows:

GDP Growth = Capital Growth*(Weight of Capital Contribution) + Labor Growth*(Weight of Labor Contribution) + Technological Progress.

Contribution to Growth of Capital = 3% * 0.3 = 0.9%

Contribution to Growth of Labour = (1 - 0.3)% = 0.7%

Total Factor Productivity = 1 + 0.3 + 0.1 = 1.4%

Answer 2

Answer: B. 0.9 percent, 0.7 percent, and 1.4 percent, respectively

Explanation:

The growth accounting equation measures how changes in the Gross Domestic Product (GDP) are influenced by productivity levels due to changes in available capital, labor, and technology.

Output and capital growth = 3%

Labor growth = 1%

Capital share = 0.3

Contribution to capital = capital growth × capital share = 3% × 0.3 = 0.9

Contribution to labor = 1% - 0.3= 0.7

Contribution to total factor of productivity = 1 + 0.3 + 0.1 = 1.4


Related Questions

The Market for Hotel Rooms. Suppose with no tax the equilibrium price is $110 and the equilibrium quantity is 250. If the local government levies a tax of $30 per night on each hotel room rented, the new equilibrium price will equal _____ and the new equilibrium quantity will equal

Answers

Answer:

130, 150

Explanation:

Here, in the question the graph is missing. So, in the attachment the graph is attached.

Equilibrium is the state or condition, where there is balance or stable situation, which means that the opposing forces cancel each other force out and no changes or variations happen or occur.

In short, it is defined as the state where the quantity demanded is equal to the  quantity supplied, where there is no loss to the business.

From the graph, we could analyze that the new equilibrium price is 130 and at this price, the new equilibrium quantity is 150.

Suppose the economy is initially in long-run equilibrium then aggregate demand rises. What will happen in the long run?

Answers

Answer with Explanation:

Once the aggregate demand rises, this means that the consumers have the capacity or are willing to purchase more of the goods and services. Once this happens for a prolonged period of time, inflation will result. This means that the prices of goods will increase at the same quantity being offered.

The increase in the prices of goods happens because once the demand of the consumer increases, the producers would try their best to meet that demand. This is effective in the short-run. However, it is hard to accommodate such huge demand in the long-run. So, this mean that the producers will have to increase the price level of the goods. This will then lower the aggregate expenditures of the consumers.

So, this explains the answer.

The Jackson Company incorrectly omitted $100,000 of merchandise from its 20X1 ending inventory. In addition, a merchandise purchase of $40,000 was incorrectly recorded as a $4,000 debit to the purchases account. As a result of these errors, 20X1 before-tax income is:___________.1. Overstated by $136,0002. Understated by $136,0003. Overstated by $640004. Undersated by $64000

Answers

Answer:

Option "4" is the correct answer to the following statement.

Explanation:

Step 1: Company omitted $100,000 from Stock account, it will Increase Cost of goods sold by $100,000

and also Profit by $100,000

Step 2: Purchase account debited by $4000 Would decrease the Cost of goods sold by ($40,000 - $4,000) $36,000 and decrease Profit by the same amount.

Total understate income = $100,000 - $36,000

= $64,000

Martha claims that she has been assigned marginal job roles or light workloads that don't lead to promotion. Which of the following terms accurately explains the type of discrimination she has been subjected to?
A) intimidation
B) sexual harassment
C) exclusion
D) inclusion
E) insult

Answers

I would say that it would be C
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