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A country has a production function as Y=10K0.4L0.6. Suppose in the current year capital has grown by 10%, labor grew 7% and total factor productivity
A country has a production function as Y=10K0.4L0.6. Suppose in the current year capital has grown by 10%, labor grew 7% and total factor productivity has grown 10%. In the end of the year the total factor productivity and output growth will be, respectively,
Answer: 10% and 18.2%, respectively.
Could you, please, help me to get to this answer?
Thanks.
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