Let the Rate of Growth of GDP Depend on Productivity

question 32

Multiple Choice

Let the rate of growth of GDP depend on productivity and the weighted average of the growth rates of capital and labor. According to the growth accounting formula, the weights assigned to the growth rates of capital and labor are

• A) the relative income elasticities of the derived demand for capital and labor.
• B) the relative shares of GDP devoted to compensating capital and labor.
• C) derived demand productivity indices computed from price elasticities.
• D) immaterial in computing the rate of growth of potential GDP.
• E) none of the above.

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