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If Capital and Labor Each Grow 5% in a Year,the

Question 48

Multiple Choice

If capital and labor each grow 5% in a year,the elasticities of output with respect to capital and labor sum to one,and productivity grows 2% in the year,by how much does output grow during the year?


A) 2%
B) 3%
C) 5%
D) 7%

Correct Answer:

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