Question
Over the past 10 years, an economy's total output, capital stock, and labor force have grown by the amounts shown in the table below. The
Over the past 10 years, an economy's total output, capital stock, and labor force have grown by the amounts shown in the table below. The measurements are in real terms and in millions. Answer the questions below using average annual growth rates and round your response to two decimal places (for example 3.76%). 2011 2021 Total Output (Y) 16,040 19,840 Capital Stock (K) 61,672 69,334 Labor Force (N) 140 157 Suppose the production function is Y = AK0.2 N0.8, where A represents the level of total factor productivity. 1.1. (3 pts) What is the average annual growth rate in aggregate output? 1.2 (3 pts) If the growth rate computed above is maintained, how often does the aggregate output of this country double? 1.3 (3 pts) What is the contribution to the aggregate economic growth of growth in capital? 1.4 (3 pts) What is the contribution to the aggregate economic growth of growth in labor? 1.5 (3 pts) What is the contribution of annual growth in total factor productivity to aggregate output annual growth?
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