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According to Solow's Growth Accounting Formula, the Growth Rate of Capital

Question 96

Multiple Choice

According to Solow's growth accounting formula, the growth rate of capital per hour of work is multiplied by one-third. This means that


A) for every 1 percent increase in capital per hour of work, GDP per hour of work will increase by one-third of a percent.
B) for every 1 percent increase in capital per hour of work, GDP per hour of work will increase by 3 percent.
C) for every 1 percent increase in GDP per hour of work, capital per hour of work will increase by one-third of a percent.
D) the value of GDP is one-third the value of the capital stock.
E) GDP is three times as large as the capital stock.

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