Suppose k and l grow at constant rates given by $\bar { g } _ { k }$ and $\bar { g } _ { i }$ and A is a constant. If $y = A k ^ { a } l ^ { 1 - a }$ the growth rate of y is $\bar { g } _ { y } = \bar { g } _ { A } + a \bar { g } _ { k } - ( 1 - a ) \bar { g } _ { l } .$

Question

Suppose k and l grow at constant rates given by $\bar { g } _ { k }$  and $\bar { g } _ { i }$  and A is a constant. If $y = A k ^ { a } l ^ { 1 - a }$  the growth rate of y is $\bar { g } _ { y } = \bar { g } _ { A } + a \bar { g } _ { k } - ( 1 - a ) \bar { g } _ { l } .$

Quizplus · Accepted Answer

The correct formula for the growth rate of y is $\bar { g } _ { y } = \bar { g } _ { A } + a \bar { g } _ { k } + ( 1 - a ) \bar { g } _ { l }$.

Suppose K and L Grow at Constant Rates Given By \bar