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Which of the Following Is a Reason Why the Coefficient

Question 20

Multiple Choice

Which of the following is a reason why the coefficient corresponding to the growth rate of capital per hour of work is one-third in Solow's growth accounting formula?


A) Capital income plus depreciation is approximately one-third of aggregate income.
B) Capital income plus depreciation is approximately three times the amount of aggregate income.
C) The amount of capital in use is approximately one-third of GDP.
D) The amount of capital in use is approximately three times the level of GDP.
E) Capital is one of the three factors of production.

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