Consider the following production function Y = A×Ka×L1?a.
If a = 0.4, and over the past year output grew 4 percent, total factor productivity (TFP) grew 2.6 percent, and labor grew 1 percent, what was the growth rate of capital?
A) 4 percent
B) 3 percent
C) 2 percent
D) 1 percent
Correct Answer:
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