Over the last year, country Y's capital per hour of labor grew 15 percent while labor productivity increased 6 percent. Using the one- third rule, percentage point(s) of this country's growth was the result of capital growth and percentage point(s) was the result of advances in technology.

Question

Quizplus · Accepted Answer

According to the one-third rule, one-third of the growth in labor productivity is attributed to capital growth. Therefore, 15% capital growth contributes 5% to labor productivity (15% * 1/3 = 5%). The remaining 1% (6% - 5%) is due to technological advances.

Over the Last Year, Country Y's Capital Per Hour of Labor