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The government of Economy 2 also manipulated its statistics. However, it inflated both the growth rate of capital and of labor. They set the growth
The government of Economy 2 also manipulated its statistics. However, it inflated both the growth rate of capital and of labor. They set the growth rate of capital to 15% and the growth rate of labor to 12%. f) When researchers estimate the rate of productivity growth (B/B), what will they find? Does this result make sense? Compare this result with the artificial rate of productivity growth of Economy 1, in what way do they differ? g) What did the government accomplish by inflating the capital numbers
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