Question:
The rate of growth of the output of an economy during a period is 5% If the shares of capital and labour are 0.6 and 0.4 respectively and capital and labour grow at 10% and 5% respectively, what is the solow residual for the output function given as y = A·kαL1-α
The rate of growth of the output of an economy during a period is 5% If the shares of capital and labour are 0.6 and 0.4 respectively and capital and labour grow at 10% and 5% respectively, what is the solow residual for the output function given as y = A·kαL1-α
Updated On: Mar 11, 2024
- 3%
- 2%
- -3%
- 4%
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The Correct Option is C
Solution and Explanation
The correct option is(C): -3%
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