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Suppose the growth rates of total factor productivity and labour are 2% and 5% respectively, and the labour's share of income is 0.7 (70%).

 

Suppose the growth rates of total factor productivity and labour are 2% and 5% respectively, and the labour's share of income is 0.7 (70%). Use the growth accounting equation to find the growth rate of capital that will give an output growth of 6.7%. Keep your answer to 2 decimal places & be sure to show your work.

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