Using the growth accounting equation, if the growth rate of technology is 3 percent, the growth rate of labor is 2 percent, the growth of capital is 1 percent, and α = 0.75, then the growth rate of output can be estimated to be:

Question

Quizplus · Accepted Answer

The growth accounting equation is: Growth rate of output = (Growth rate of technology) + α*(Growth rate of capital) + (1-α)*(Growth rate of labor). Substituting the given values: 3% + 0.75*1% + 0.25*2% = 4.25%.

Using the Growth Accounting Equation, If the Growth Rate of Technology