Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An economy of 80 million people has ten percent of them engaged in research and development, where their productivity is 0.0035. The economy is on

An economy of 80 million people has ten percent of them engaged in research and development, where their productivity is 0.0035. The economy is on a balanced growth path, when suddenly 2.88 million people move from goods production into R&D, raising the fraction there to 13.6 percent. In the one period that begins with this labor reallocation, the growth rate of output is ________. [Refer to the instruction above.]

A) 2.8%

B) 0.0%

C) 3.8%

D) 2.2%

Please clearly explain it. Step by step. Thank you from the bottom of my heart.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Economics Of The Environment

Authors: Peter Berck, Gloria Helfand

1st Edition

978-0321321664, 0321321669

More Books

Students also viewed these Economics questions

Question

Using colon operator, create the following row vector. 8 6 4 2

Answered: 1 week ago