References: Bernanke,Olekalns,Frank,Antonovics&Heffetz(2019):PrinciplesofMacroeconomics.5thEdition.Mc-GrawHill

Questions:

Questions. 1. Growth Accounting (3 marks). The graph below shows that the labor share in Australia has been declining since the late 19703. Labour Share of Income"r 60 55 50 45 45 19T8 1985 1993 2003 2018 * Compensation oi empioyees divided by total factor income Sources: OECD; RBA Consider the statement in italics below. The declining labour share, which is expected to continue in the future, implies that Australia will emperience faster economic growth {growth in GDP per capita) in the future. Assuming that the productiOn functicm in Australia is the Cobb-Douglas production function, do you agree or disagree with this statement? Explain your reasoning