The intercept (1.5) in this equation is best interpreted as: A. the long-run sustainable growth rate. B.

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The intercept (1.5) in this equation is best interpreted as:

A. the long-run sustainable growth rate.

B. the growth rate of total factor productivity.

C. above-trend historical growth that is unlikely to be sustained.

An economic forecasting firm has estimated the following equation from historical data based on the neoclassical growth model:

Potential output growth $=1.5+0.72($ Growth of labor $)+0.28($ Growth of capital)

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Economics For Investment Decision Makers

ISBN: 9781118111963

1st Edition

Authors: Sandeep Singh, Christopher D Piros, Jerald E Pinto

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Question Posted: Mar 09, 2024 11:02 AM

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The intercept (1.5) in this equation is best interpreted as: A. the long-run sustainable growth rate. B.

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The most appropriate interpretation would likely be B The growth rate of total factor ...View the full answer

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