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Question 5

Multiple Choice

The next questions refer to the following.
Suppose the economy has TFP = 10, there are 400 hours worked, and 60 unit of capital and 210 units of land the Cobb-Douglas production function is:
Output = TFP x Hours0.3 x Capital0.3 x Land0.2.
-In this economy,approximately how fast would the capital stock need to grow to produce growth of 1% per annum?


A) 1% per annum
B) 2.5% per annum
C) 3.3% per annum
D) 4.8% per annum
E) 5.2% per annum

Correct Answer:

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