Question

The economy has grown by 4% per year over the past 20 years. During the same period the labor force has grown by 1% per year and the quantity of physical capital has grown by 5% per year. Each 1% increase in physical capital per worker is estimated to increase productivity by 0.4%. Assume that human capital has not changed during the past 30 years. What is the growth rate of productivity?

Answer 1

Answer:

16.9%

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