Assume that capital per hour of labor grows 4 percent and real GDP per hour of labor grows 3 percent. According to the one- third rule, what part of the 3 percent growth of real GDP per hour of labor is attributable to the growth of capital?

Question

Quizplus · Accepted Answer

The one-third rule states that one-third of the growth in real GDP per hour of labor is attributable to the growth of capital. Therefore, 1/3 of 3% = 1% of the growth in real GDP per hour of labor is attributable to the growth of capital.

Assume That Capital Per Hour of Labor Grows 4 Percent