Question
Suppose we have an aggregate production function: Y=AK a N 1-a . Take a=1/3. Productivity (A) grew at 4 percent, capital grew at 3 percent,
Suppose we have an aggregate production function: Y=AKaN1-a. Take a=1/3.
Productivity (A) grew at 4 percent, capital grew at 3 percent, and employment(population) grew at 3 percent.
a) How much did total income grow?
b) How much did income per capita grow?
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Foundations of Business
Authors: William M. Pride, Robert J. Hughes, Jack R. Kapoor
6th edition
1337386928, 9781337670975 , 978-1337386920
