Essay
Suppose the production function in an economy is given by Y = AK⁰.³ L⁰.⁷,where Y is output,K capital,L labour and A measures productivity.If K = 20 and L = 80 and Y = 100:
a.Find the Solow residual.
b.Find the Solow residual for next year when Y = 120.
c.What is the productivity growth in year 2 measured by the Solow residual.
d.How do capital and labour utilization rates affect Solow residual?
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a.1.89,b.2.27,c.20 percent,
d.The conven...View Answer
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d.The conven...
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